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ITW

NEUTRAL
$243.97 Live
Illinois Tool Works Inc. · NYSE
Target $259.0 (+6.2%)
$214.66 52W Range $279.13
Overview AI Snowflake Price Valuation Profitability Growth Health Peers Insiders

At a glance

Key valuation, profitability, growth, and risk metrics.

Updated Nov 16, 2025
Market cap
$71.16B
P/E
23.64
ROE
91.7%
Profit margin
19.1%
Debt/Equity
2.79
Dividend yield
2.64%

AI Analysis

AI-powered fundamental assessment

Confidence
72%
Illinois Tool Works (ITW) trades at a premium valuation with solid long-term profitability and a disciplined capital allocation track record, but near-term earnings contraction and weakening growth momentum present headwinds. Despite a robust ROE of 91.68% and gross margins above 43%, YoY earnings have declined by 28.1%, and insider selling activity over the past six months signals caution at current levels. The stock is down 7.4% over the past year, underperforming key peers like 3M and Northrop Grumman, while trading below the analyst consensus target of $259.00. Relative to the industrials sector, ITW exhibits stronger margins and return metrics but faces elevated leverage and tepid revenue growth of just 2.3%, limiting near-term upside potential.

Key Strengths

Exceptional profitability with ROE of 91.68% — significantly above sector average of 35.76% and peer group
High operating leverage evidenced by 27.67% operating margin and 43.93% gross margin, among the best in the industrials sector
Consistent earnings beat record: 3 out of last 4 quarters beat estimates, with a strong historical surprise average of +4.5% over the last 10 quarters
Attractive dividend yield of 2.64% supported by a sustainable 59.26% payout ratio and long-standing policy
Trading below analyst target price of $259.00, implying ~6.1% upside from current levels

Key Risks

Earnings under pressure with YoY decline of 28.1% and Q/Q drop of 29.2%, indicating near-term profitability weakness
Revenue growth lags peers at only 2.3% YoY vs sector average of 7.02%, raising concerns about top-line resilience
High debt/equity ratio of 2.79 — above sector average of 1.77 and even riskier than leveraged peers like Lockheed Martin (3.59)
Insider selling activity: $2.18M in sales over last 6 months with no buys, suggesting lack of confidence at current valuation
Rich valuation multiples: P/E of 23.64 and Price/Book of 22.06 — premium to sector averages (P/E 27.01 but P/B not provided) and raising multiple compression risk
AI Fair Value Estimate
Based on comprehensive analysis
$259.0
+6.2% above current price

Performance Snowflake

Multi-dimensional analysis across 5 key categories

Overall
67
Strong
Value
60
Future
58
Past
82
Health
55
Dividend
80
AI Verdict
ITW demonstrates elite profitability and operational efficiency, but elevated leverage, slowing earnings growth, and premium valuation constrain upside despite being below the $259 analyst target; it trades as a quality stock priced near fair value with limited margin of safety relative to peers like NOC and MMM.
Key drivers: Superior historical profitability and margin structure, Near-term earnings contraction and weak revenue growth, Premium valuation offset by dividend yield and analyst upside
Confidence
75%
Value
60/100

While ITW’s P/E is below the industrials sector average, its Price/Book ratio is exceptionally high compared to peers — 3M (P/B ~7.5), NOC (~6.5), LMT (~7.0) — indicating it is priced for perfection despite weaker growth.

Positives
  • Forward P/E of 22.80 is below the sector average of 27.01, offering relative value on earnings basis
  • Trading below $259 analyst target implies 6.1% upside, providing modest margin of safety
Watchpoints
  • Price/Book of 22.06 is extremely high, suggesting significant intangible premium and balance sheet risk
  • EV/EBITDA and other enterprise metrics unavailable, limiting full valuation assessment
Future
58/100

Despite a recent quarterly EPS rebound, the broader trend shows deteriorating earnings momentum, with 1Y price return of -7.4% reflecting market skepticism about growth durability in a challenging macro environment.

Positives
  • Recent Q/Q EPS growth of +8.9% suggests potential inflection in earnings trajectory
  • Analyst target implies continued confidence in recovery and moderate growth
Watchpoints
  • Revenue growth of 2.3% YoY is well below sector average of 7.02%, signaling weak top-line momentum
  • Earnings growth down 28.1% YoY and -29.2% Q/Q raises sustainability concerns
Past
82/100

ITW has a proven track record of earnings execution and margin discipline over 25 quarters, but recent misses and subpar 1Y price performance suggest the market is pricing in a cyclical slowdown despite strong historical consistency.

Positives
  • Consistently beats earnings estimates — 21 out of 25 quarters positive surprises, including several double-digit beats
  • High and stable profitability: ROA of 16.42%, ROE of 91.68%, and operating margin of 27.67% reflect pricing power and operational excellence
Watchpoints
  • Most recent quarter (2024-02-01) missed estimates by -1.6%, breaking a long streak of beats
  • 5Y return of +29.2% lags behind peers like 3M (+29.7% 1Y alone) and NOC (+13.5% 1Y)
Health
55/100

ITW maintains sufficient liquidity but carries a heavier capital structure than most peers — only LMT (3.59) is more leveraged — which could pressure returns if interest rates remain elevated or growth slows further.

Positives
  • Current ratio of 1.53 and quick ratio of 1.01 indicate adequate short-term liquidity
  • Operating cash flow and free cash flow data unavailable, but historical strength suggests resilience
Watchpoints
  • Debt/Equity of 2.79 is high and exceeds sector average of 1.77, increasing financial risk
  • Total debt and cash figures unavailable, limiting visibility into net leverage and refinancing risk
Dividend
80/100

ITW offers a reliable and well-covered dividend that enhances total return potential, though lack of growth trend data and recent earnings weakness warrant monitoring for future policy changes.

Positives
  • Dividend yield of 2.64% is attractive within the industrials sector and above S&P 500 average
  • Payout ratio of 59.26% is sustainable given stable cash flows and long history of disciplined capital returns
Watchpoints
  • No data on 5-year average yield or dividend growth trend, limiting visibility into consistency
  • Dividend sustainability could be pressured if earnings decline persists

Stock Price & Analyst Targets

Real-time price movements and analyst price targets

Current Price
$243.97
Analyst Target
$259.0
Upside/Downside
+6.2%

Multi-Horizon Performance vs Peers

Price momentum across 5Y → 1W horizons for ITW and closest competitors.

Updated 2025-11-14
ITW
Illinois Tool Works Inc.
Primary
5Y
+29.2%
3Y
+14.8%
1Y
-7.4%
6M
-1.7%
1M
-1.5%
1W
-0.6%
EMR
Emerson Electric Co.
Peer
5Y
+81.5%
3Y
+40.8%
1Y
+1.0%
6M
+6.7%
1M
-1.6%
1W
-1.1%
NSC
Norfolk Southern Corporation
Peer
5Y
+26.9%
3Y
+62.3%
1Y
+47.8%
6M
+14.3%
1M
+13.3%
1W
+6.2%
CNI
Canadian National Railway Company
Peer
5Y
+15.4%
3Y
+2.8%
1Y
+19.6%
6M
+21.0%
1M
+12.5%
1W
+3.9%
PCA
PACCAR Inc
Peer
5Y
+153.3%
3Y
+90.2%
1Y
+41.8%
6M
+28.2%
1M
+12.8%
1W
-0.9%

Positive values indicate cumulative gains over the specified period. Comparables pulled from the same sector to highlight whether momentum is stock-specific or industry-wide.

Historical Performance Trends

Long-term financial metrics and growth patterns

Revenue & Net Income

Profit & Operating Margins

Return on Equity (ROE)

Quarterly Revenue Growth

Historical data shows last 12 quarters (3 years)

Valuation Metrics

Key valuation ratios and pricing indicators

P/E Ratio
23.64
Forward P/E
22.8
PEG Ratio
N/A
P/B Ratio
22.06
P/S Ratio
4.48
EV/Revenue
4.96
EV/EBITDA
17.16
Market Cap
$71.16B

Profitability

Profit margins and return metrics

Profit Margin 19.05%
Operating Margin 27.67%
Gross Margin 43.93%
ROE 91.68%
ROA 16.42%

Growth

Revenue and earnings growth rates

Revenue Growth +2.3%
Earnings Growth -28.1%
Q/Q Revenue Growth N/A
Q/Q Earnings Growth -29.2%

Financial Health

Balance sheet strength and liquidity metrics

Debt/Equity
2.79
High debt
Current Ratio
1.53
Good
Quick Ratio
1.01
Good
Cash/Share
$3.19

Quarterly Earnings History

EPS performance vs analyst estimates

2026-02-04
$N/A
2025-10-24
$2.81
+3.5% surprise
2025-07-30
$2.58
+0.6% surprise
2025-04-30
$2.38
+1.1% surprise

Industrials Sector Comparison

Comparing ITW against 469 companies in the Industrials sector (39 bullish, 174 neutral, 256 bearish)
P/E Ratio
23.64
This Stock
vs
98.24
Sector Avg
-75.9% (Discount)
Return on Equity (ROE)
91.68%
This Stock
vs
-19.38%
Sector Avg
-573.0% (Below Avg)
Profit Margin
19.05%
This Stock
vs
6.65%
Sector Avg
+186.3% (Superior)
Debt to Equity
2.79
This Stock
vs
2.63
Sector Avg
+5.8% (Higher)
Revenue Growth
2.3%
This Stock
vs
71.29%
Sector Avg
-96.8% (Slower)
Current Ratio
1.53
This Stock
vs
3.09
Sector Avg
-50.5% (Weaker)

Similar Companies

Peer comparison within the same industry

ITW Illinois Tool Works Inc.
NEUTRAL
Mkt Cap
$71.2B
P/E
23.6
ROE
91.7%
Price
$243.97
EMR Emerson Electric Co.
NEUTRAL
Mkt Cap
$72.2B
P/E
31.7
ROE
9.4%
Price
$127.58
 Compare with ITW
NSC Norfolk...
BEARISH
Mkt Cap
$72.2B
P/E
25.2
ROE
19.2%
Price
$321.44
 Compare with ITW
CNI Canadian...
NEUTRAL
Mkt Cap
$70.1B
P/E
20.7
ROE
22.1%
Price
$114.6
 Compare with ITW
PCAR PACCAR Inc
NEUTRAL
Mkt Cap
$66.9B
P/E
28.2
ROE
12.9%
Price
$127.2
 Compare with ITW

Recent Insider Trading

Insider buy and sell transactions from the last 6 months

SANTI ERNEST SCOTT
Director
Stock Award
2025-11-07
142 shares · $34,860
FORD DARRELL L
Director
Stock Award
2025-11-07
142 shares · $34,860
SMITH DAVID BYRON JR.
Director
Stock Award
2025-11-07
157 shares · $38,542
STROBEL PAMELA B
Director
Gift
2025-11-05
1,034 shares
STROBEL PAMELA B
Director
Sell
2025-11-05
1,521 shares · $373,025
SCHEUNEMAN RANDALL J
Officer
Option Exercise
2025-09-11
6,802 shares · $870,656
SCHEUNEMAN RANDALL J
Officer
Sell
2025-09-11
6,802 shares · $1,803,074
SANTI ERNEST SCOTT
Director
Gift
2025-08-21
3,790 shares
SANTI ERNEST SCOTT
Director
Stock Award
2025-08-01
138 shares · $35,000
FORD DARRELL L
Director
Stock Award
2025-08-01
138 shares · $35,000
SMITH DAVID BYRON JR.
Director
Stock Award
2025-08-01
153 shares · $38,603
SMITH DAVID BYRON JR.
Director
Gift
2025-06-02
872 shares
SMITH DAVID BYRON JR.
Director
Buy
2025-06-02
872 shares · $210,292
Insider transactions can signal confidence or concerns about company prospects

Wall Street Analysts

Professional analyst ratings and price targets

Consensus
HOLD
16 analysts
Barclays
2025-10-27
Maintains
Underweight Underweight
Truist Securities
2025-10-27
Maintains
Hold Hold
Wells Fargo
2025-10-27
Maintains
Underweight Underweight
Truist Securities
2025-10-08
Maintains
Hold Hold
Barclays
2025-08-14
down
Equal-Weight Underweight
Barclays
2025-08-04
Maintains
Equal-Weight Equal-Weight
Stifel
2025-07-31
Maintains
Hold Hold
Wells Fargo
2025-07-31
Maintains
Underweight Underweight
UBS
2025-07-31
Maintains
Neutral Neutral
Stifel
2025-07-21
Maintains
Hold Hold

Past News Coverage

Recent headlines mentioning ITW from our newsroom.

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