Illinois Tool Works Inc
Exchange: NYSESector: IndustrialsIndustry: Specialty Industrial Machinery
ITW is a Fortune 300 global multi-industrial manufacturing leader with revenue of $16.1 billion in 2023. The company’s seven industry-leading segments leverage the unique ITW Business Model to drive solid growth with best-in-class margins and returns in markets where highly innovative, customer-focused solutions are required. ITW’s approximately 45,000 dedicated colleagues around the world thrive in the company’s decentralized and entrepreneurial culture.
Did you know?
Earnings per share grew at a 3.3% CAGR.
Current Price
$269.74
+0.17%GoodMoat Value
$177.53
34.2% overvaluedProfile
Valuation (TTM)
Market Cap$78.22B
P/E25.51
EV$84.32B
P/B24.26
Shares Out290.00M
P/Sales4.88
Revenue$16.04B
EV/EBITDA18.55
Illinois Tool Works Inc (ITW) Stock Analysis
GoodMoat Analysis
Illinois Tool Works is a high-quality industrial conglomerate with a potentially durable moat, evidenced by strong profitability metrics like a 26.3% operating margin and a 95.1% ROE. However, its current price of $266.45 is significantly above the GoodMoat target of $177.53, suggesting an unfavourable valuation with a negative margin of safety.
Read full analysis
Illinois Tool Works (ITW) is a diversified manufacturer of engineered components and industrial systems across seven segments, including automotive, food equipment, and welding. The company's primary competitive advantages appear to be high switching costs and niche dominance, as its specialized, mission-critical fasteners and components are deeply embedded in customer manufacturing processes. While a full Moat Identification score requires deeper analysis, its exceptional 95.1% Return on Equity and 26.3% operating margin strongly suggest a durable competitive advantage and high-quality operations, likely meeting the framework's gate to proceed to valuation analysis. The critical issue is valuation. The current P/E of 25.2x, combined with modest 4.1% revenue growth, indicates the market is pricing in perfection. The GoodMoat target price of $177.53 implies the stock is trading at a significant premium to its estimated intrinsic value, resulting in a negative margin of safety. Furthermore, a Debt/Equity ratio of 2.78 is a point for scrutiny, though mitigated by strong cash generation. Applying the Decision Framework, ITW likely passes the Moat & Quality Gate but fails the Valuation & Risk Gate. The combination of an elevated price relative to the target and high financial leverage suggests the current setup is unfavourable for a value investor seeking a margin of safety. Further investigation would focus on justifying the premium multiple through durable growth drivers not reflected in the recent top-line growth rate. Analysis based on data as of 2024-05-15.
Market Cap$78.22B
Current Price$269.74
P/E Ratio25.51
Forward P/E—
PEG Ratio3.61
EPS$10.49
Book Value$11.12
P/B Ratio24.26
ITW Financial Charts
FCF vs CAPEX
FCFCAPEX
Forward estimates use 0.1% FCF growth (CAGR)
Cash vs Debt
Net Debt: 8.1B
Revenue
14.1B
FY19
12.6B
FY20
14.5B
FY21
15.9B
FY22
16.1B
FY23
15.9B
FY24
16.0B
FY25
Net Income
2.5B
FY19
2.1B
FY20
2.7B
FY21
3.0B
FY22
3.0B
FY23
3.5B
FY24
3.1B
FY25
ITW 52-Week Range
$233.36
$297.76
50-Day MA: $272.67200-Day MA: $258.30
Did you know?
Earnings per share grew at a 3.3% CAGR.
Illinois Tool Works Inc (ITW) Financial Summary
Illinois Tool Works Inc (ITW) is a Industrials company in the Specialty Industrial Machinery industry, listed on NYSE. The stock currently trades at $269.74 with a market capitalization of $78.22B.
Key valuation metrics include a P/E ratio of 25.51, price-to-book ratio of 24.26, and EPS of $10.49. The company reports a profit margin of 19.1% and return on equity of 95.1%.
ITW Key Financial Metrics
| Metric | Value |
|---|---|
| Market Cap | $78.22B |
| P/E Ratio | 25.51 |
| EPS | $10.49 |
| P/B Ratio | 24.26 |
| P/S Ratio | 4.88 |
| EV/EBITDA | 18.55 |
| Dividend Yield | 2.28% |
| Profit Margin | 19.1% |
| Return on Equity | 95.1% |
| Debt/Equity | 2.78 |
ITW Revenue & Earnings History
| Year | Revenue | Net Income |
|---|---|---|
| FY19 | $14.11B | $2.52B |
| FY20 | $12.57B | $2.11B |
| FY21 | $14.46B | $2.69B |
| FY22 | $15.93B | $3.03B |
| FY23 | $16.11B | $2.96B |
| FY24 | $15.90B | $3.49B |
| FY25 | $16.04B | $3.07B |
Illinois Tool Works Inc (ITW) Valuation
Based on GoodMoat's DCF model, Illinois Tool Works Inc has a fair value estimate of $177.53. At the current price of $269.74, the stock appears 51.9% overvalued relative to our intrinsic value estimate.
ITW Quality Indicators
Illinois Tool Works Inc maintains a profit margin of 19.1% and an operating margin of 26.3%. Return on equity stands at 95.1%. The current ratio is 1.21. Debt-to-equity ratio is 2.78.
About Illinois Tool Works Inc
ITW is a Fortune 300 global multi-industrial manufacturing leader with revenue of $16.1 billion in 2023. The company’s seven industry-leading segments leverage the unique ITW Business Model to drive solid growth with best-in-class margins and returns in markets where highly innovative, customer-focused solutions are required. ITW’s approximately 45,000 dedicated colleagues around the world thrive in the company’s decentralized and entrepreneurial culture.
ITW Free Cash Flow
Illinois Tool Works Inc generated $2.72B in trailing twelve-month free cash flow, representing an FCF yield of 3.47%. This moderate FCF yield indicates reasonable cash generation.
ITW Shares Outstanding
Illinois Tool Works Inc has 0.29 billion shares outstanding at a share price of $269.74, giving it a market capitalization of $78.22B.
ITW Recent Insider Trades
Recent insider transactions at Illinois Tool Works Inc include:
| Insider | Type | Shares | Value |
|---|---|---|---|
| Lawler Mary Katherine (SVP & Chief HR Officer) | SELL | 17,279 | $5.04M |
| Beck Axel (Executive Vice President) | SELL | 4,223 | $1.23M |
| SANTI ERNEST SCOTT | SELL | 47,885 | $13.83M |