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Illinois Tool Works
(NYSE:ITW)
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Rating:70Outperform
Price Target:
$304.00
â–²(11.66% Upside)
Action:Upgraded
Date:05/13/26
The score is driven by strong underlying profitability and cash generation plus a constructive earnings outlook (raised EPS guidance, margin expansion expectations, and buybacks). Offsetting this are a leveraged balance sheet, modest organic growth, and currently weak technical momentum with the stock trading below key moving averages.
Positive Factors
High margins and pricing power
Sustained high gross and net margins indicate structural pricing power and efficient operations across businesses. Durable margin levels support cash generation and resilience through cycles, enabling reinvestment and shareholder returns even when organic growth is modest.
Negative Factors
Elevated leverage
High and rising debt‑to‑equity reduces financial flexibility and increases interest‑rate and downturn sensitivity. Leverage amplifies returns in good times but constrains capital allocation and raises refinancing risk if industrial demand softens or rates stay elevated.
Read all positive and negative factors
Positive Factors
Negative Factors
High margins and pricing power
Sustained high gross and net margins indicate structural pricing power and efficient operations across businesses. Durable margin levels support cash generation and resilience through cycles, enabling reinvestment and shareholder returns even when organic growth is modest.
Read all positive factors
Illinois Tool Works Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows how much each business segment contributes to total sales, indicating diversification and potential growth areas within the company.
Shows how much each business segment contributes to total sales, indicating diversification and potential growth areas within the company.
Data provided by:
The Fly
The FlyIllinois Tool Works (ITW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$79.42B
Dividend Yield2.37%
Average Volume (3M)1.33M
Price to Earnings (P/E)25.2
Beta (1Y)0.64
Revenue Growth2.90%
EPS Growth-5.25%
CountryUS
Employees43,000
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)10.79
Shares Outstanding287,700,000
10 Day Avg. Volume1,252,208
30 Day Avg. Volume1,334,079
Financial Highlights & Ratios
PEG Ratio-2.24
Price to Book (P/B)22.32
Price to Sales (P/S)4.49
P/FCF Ratio26.59
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$279.44Price Target Upside2.64% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering9
EPS Forecast (FY)11.31
Revenue Forecast (FY)$16.60B
Illinois Tool Works Business Overview & Revenue Model
Company Description
Illinois Tool Works Inc. is a global enterprise specializing in the production and distribution of a wide array of industrial goods and specialized equipment. The company operates through seven distinct divisions: Automotive OEM; Food Equipment; T...
How the Company Makes Money
ITW primarily makes money by selling engineered products, consumables, and related equipment across its operating segments to business customers (B2B). Its revenue model is largely transaction-based (unit sales of equipment, components, and consum...
Illinois Tool Works Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 28, 2026
Earnings Call Sentiment Positive
The call emphasized multiple constructive operational and financial takeaways — revenue growth, 12% EPS growth, margin expansion (driven by Enterprise Initiatives), strong performance in CapEx- and semi-related segments (Test & Measurement, Welding), and an upward EPS guidance revision. Short-term headwinds were noted in Food Equipment and Specialty Products due to seasonal/one-off timing, PLS and delayed Middle East shipments, and companywide organic growth remained modest (0.4%) in Q1. Management expressed confidence in sequential improvement, raised confidence in guidance, and expects incremental and operating margins to improve through the year. On balance, positive momentum and outlook outweigh the isolated challenges.Positive Updates
Quarterly Revenue Growth and Drivers
Reported Q1 revenue growth of 4.6% (company also cited ~5% in commentary) driven by organic growth of 0.4%, a +3.9% contribution from foreign currency translation and +0.3% from an acquisition.
Negative Updates
Modest Organic Growth Companywide
Organic growth in Q1 was only 0.4%, reduced by ~1 percentage point due to product line simplification (PLS) and delayed Middle East sales; Specialty PLS and delays contributed materially to the drag.
Read all updates
Q1-2026 Updates
Positive
Negative
Quarterly Revenue Growth and Drivers
Reported Q1 revenue growth of 4.6% (company also cited ~5% in commentary) driven by organic growth of 0.4%, a +3.9% contribution from foreign currency translation and +0.3% from an acquisition.
Read all positive updates
Company Guidance
The company raised full‑year GAAP EPS guidance by $0.10 to $11.10–$11.50 (midpoint $11.30, +8% year‑over‑year), while maintaining total revenue guidance of 2%–4% and organic growth of 1%–3%; operating margin is expected to expand about 100 basis points to 26.5%–27.5% (Enterprise Initiatives ~100 bps contribution), incremental margins are expected in the mid‑ to high‑40s, and the effective tax rate is forecast at 23%–24%. In Q1, revenue grew roughly 5% (4.6% reported: organic +0.4%, FX +3.9%, acquisitions +0.3%), GAAP EPS was $2.66 (+12%), operating margin was 25.4% (up 60 bps) with Enterprise Initiatives contributing 120 bps, and incremental margins were ~40%; free cash flow grew 6% with 69% conversion in Q1 and the company expects FCF conversion to exceed 100% of net income for the year and to repurchase about $1.5 billion of shares in 2026 (Q1 buybacks $375 million). All seven segments are projected to deliver positive organic growth and margin expansion.Illinois Tool Works Financial Statement Overview
Summary
Income Statement
83
Very Positive
Balance Sheet
58
Neutral
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 16.22B | 16.04B | 15.90B | 16.11B | 15.93B | 14.46B |
| Gross Profit | 7.16B | 7.08B | 6.94B | 6.68B | 6.37B | 5.83B |
| EBITDA | 4.65B | 4.65B | 5.11B | 4.48B | 4.46B | 3.94B |
| Net Income | 3.13B | 3.07B | 3.49B | 2.96B | 3.03B | 2.69B |
Balance Sheet | ||||||
| Total Assets | 16.26B | 16.15B | 15.07B | 15.52B | 15.42B | 16.08B |
| Cash, Cash Equivalents and Short-Term Investments | 827.00M | 851.00M | 948.00M | 1.06B | 708.00M | 1.53B |
| Total Debt | 9.15B | 8.97B | 8.08B | 8.37B | 7.95B | 7.88B |
| Total Liabilities | 13.03B | 12.92B | 11.75B | 12.51B | 12.33B | 12.45B |
| Stockholders Equity | 3.23B | 3.23B | 3.32B | 3.01B | 3.09B | 3.63B |
Cash Flow | ||||||
| Free Cash Flow | 2.74B | 2.71B | 2.84B | 3.08B | 1.94B | 2.26B |
| Operating Cash Flow | 3.16B | 3.13B | 3.28B | 3.54B | 2.35B | 2.56B |
| Investing Cash Flow | -528.00M | -521.00M | -144.00M | -403.00M | -110.00M | -984.00M |
| Financing Cash Flow | -2.70B | -2.74B | -3.19B | -2.78B | -3.00B | -2.56B |
Illinois Tool Works Technical Analysis
Positive
272.26
Price Trends
258.30
Positive
262.56
Positive
257.76
Positive
Market Momentum
4.72
Negative
60.09
Neutral
73.58
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ITW, the sentiment is Positive. The current price of 272.26 is above the 20-day moving average (MA) of 269.02, above the 50-day MA of 258.30, and above the 200-day MA of 257.76, indicating a bullish trend. The MACD of 4.72 indicates Negative momentum. The RSI at 60.09 is Neutral, neither overbought nor oversold. The STOCH value of 73.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ITW.
Illinois Tool Works Risk Analysis
Illinois Tool Works disclosed 17 risk factors in its most recent earnings report. Illinois Tool Works reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Illinois Tool Works Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $120.19B | 34.59 | 24.69% | 0.79% | 6.03% | 4.26% | |
77 Outperform | $51.39B | 47.49 | 30.25% | 1.33% | 10.45% | 21.30% | |
72 Outperform | $36.65B | 22.52 | 8.75% | 0.73% | 12.07% | 15.20% | |
71 Outperform | $155.32B | 39.12 | 20.81% | 1.29% | 12.68% | 3.12% | |
71 Outperform | $78.16B | 31.40 | 12.11% | 1.58% | 4.03% | 3.51% | |
70 Outperform | $79.42B | 25.18 | 97.38% | 2.43% | 2.90% | -5.25% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
ITW
Illinois Tool Works
271.69
23.33
9.39%
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-184.26
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Illinois Tool Works Corporate Events
Executive/Board Changes
Illinois Tool Works Announces Chief Accounting Officer Transition
Neutral
May 22, 2026
On May 19, 2026, Illinois Tool Works announced that Vice President and Chief Accounting Officer Randall J. Scheuneman will step down from his current role effective June 30, 2026, ahead of his planned retirement on March 1, 2027. He will remain wi...
Executive/Board ChangesShareholder Meetings
Illinois Tool Works Shareholders Endorse Board and Governance
Positive
May 12, 2026
At its May 8, 2026 annual meeting of stockholders, Illinois Tool Works shareholders elected all 13 board nominees to one‑year terms ending at the 2027 meeting, signaling continued support for the company’s existing governance and leade...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.