Illinois Tool Works (ITW) AI Stock Analysis

• Market Cap: $70.78B
• Dividend Yield: 2.52%
• Average Volume (3M): 1.27M
• Price to Earnings (P/E): 23.7
• Beta (1Y): 0.75
• Revenue Growth: -0.41%
• EPS Growth: -10.88%
• Country: US
• Employees: 44,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 2.81
• Shares Outstanding: 290,100,000
• 10 Day Avg. Volume: 1,072,012
• 30 Day Avg. Volume: 1,265,519
• PEG Ratio: 1.06
• Price to Book (P/B): 22.69
• Price to Sales (P/S): 4.73
• P/FCF Ratio: 26.46
• Enterprise Value/Market Cap: 1.19
• Enterprise Value/Revenue: 5.29
• Enterprise Value/Gross Profit: 12.13
• Enterprise Value/Ebitda: 18.26
• 1Y Price Target: $257.11
• Price Target Upside: 5.39% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 9
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: $272.00 ▲(11.49% Upside)

Illinois Tool Works scores a 71, driven by strong financial performance and positive earnings call highlights. The company's profitability and cash generation are robust, but high leverage and flat revenue growth are concerns. Technical indicators suggest a bearish trend, while valuation metrics show moderate attractiveness. The earnings call reflects confidence in the company's operations despite some segment challenges.

Positive Factors

Strong Profitability

ITW's consistent profitability margins indicate efficient operations and a strong ability to convert sales into profit, supporting long-term financial stability.

Cash Generation

Strong cash generation allows ITW to reinvest in growth opportunities, pay dividends, and reduce debt, enhancing its financial flexibility and resilience.

Dividend Increase

Consistent dividend increases reflect ITW's robust cash flow and management's confidence in sustaining shareholder returns, reinforcing investor trust.

Negative Factors

High Leverage

High leverage can limit financial flexibility and increase risk, especially in downturns, potentially impacting ITW's ability to invest in growth or weather economic challenges.

Flat Revenue Growth

Stagnant revenue growth may indicate market saturation or competitive pressures, challenging ITW's ability to expand its market share and drive future earnings.

Segment Challenges

Ongoing challenges in key segments like construction and polymers & fluids could hinder overall performance, requiring strategic adjustments to regain momentum.

Illinois Tool Works Business Overview & Revenue Model

Company Description

Illinois Tool Works Inc. manufactures and sells industrial products and equipment worldwide. It operates through seven segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products. The Automotive OEM segment offers plastic and metal components, fasteners, and assemblies for automobiles, light trucks, and other industrial uses. The Food Equipment segment provides warewashing, refrigeration, cooking, and food processing equipment; kitchen exhaust, ventilation, and pollution control systems; and food equipment maintenance and repair services. The Test & Measurement and Electronics segment produces and sells equipment, consumables, and related software for testing and measuring of materials and structures, as well as equipment and consumables used in the production of electronic subassemblies and microelectronics. The Welding segment produces arc welding equipment; and metal arc welding consumables and related accessories. The Polymers & Fluids segment produces adhesives, sealants, lubrication and cutting fluids, and fluids and polymers for auto aftermarket maintenance and appearance. The Construction Products segment offers engineered fastening systems and solutions for the residential construction, renovation/remodel, and commercial construction markets. The Specialty Products segment offers beverage packaging equipment and consumables, product coding and marking equipment and consumables, and appliance components and fasteners. It serves the automotive OEM/tiers, commercial food equipment, construction, general industrial, and automotive aftermarket end markets. The company distributes its products directly to industrial manufacturers, as well as through independent distributors. Illinois Tool Works Inc. was founded in 1912 and is based in Glenview, Illinois.

How the Company Makes Money

ITW generates revenue through a diversified portfolio of products and services across its various segments. The company primarily makes money by selling its manufactured goods, which include industrial equipment, components, and consumables tailored for specific industries. Key revenue streams come from sectors such as automotive, where they supply essential components, and food equipment, where they offer cooking and food processing machines. ITW also benefits from its strong focus on innovation, allowing for premium pricing on specialized products. The company has established significant partnerships with major industries, enhancing its market reach and enabling long-term contracts that provide a steady revenue flow. Additionally, ITW's operational efficiency and cost management strategies contribute to its profitability, as they help maintain healthy margins across its diverse offerings.

Illinois Tool Works Financial Statement Overview

Summary

Illinois Tool Works exhibits strong profitability and cash generation capabilities, with consistent margins and a solid return on equity. However, the high leverage and recent stagnation in revenue growth could be potential risks. Overall, the company is financially sound but should monitor its debt levels and seek to reinvigorate revenue growth.

Income Statement

Illinois Tool Works demonstrates strong profitability with a consistent gross profit margin around 43-44% and a solid net profit margin of approximately 19-22% over the years. The EBIT and EBITDA margins are also robust, indicating efficient operations. However, revenue growth has been relatively flat recently, with a slight decline in the latest TTM period, which could be a concern if it continues.

Balance Sheet

The company maintains a high debt-to-equity ratio, indicating significant leverage, which could pose a risk if not managed carefully. Return on equity is impressive, consistently above 90%, showcasing strong profitability relative to shareholder equity. The equity ratio is relatively low, reflecting the high leverage.

Cash Flow

Operating cash flow is strong, covering net income well, and free cash flow has shown growth in the latest TTM period. However, fluctuations in free cash flow growth in previous years suggest some volatility. The free cash flow to net income ratio remains healthy, indicating good cash generation relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	15.88B	15.90B	16.11B	15.93B	14.46B	12.57B
Gross Profit	6.93B	6.94B	6.68B	6.37B	5.83B	5.04B
EBITDA	4.61B	5.11B	4.48B	4.46B	3.94B	3.34B
Net Income	3.03B	3.49B	2.96B	3.03B	2.69B	2.11B
Balance Sheet
Total Assets	16.14B	15.07B	15.52B	15.42B	16.08B	15.61B
Cash, Cash Equivalents and Short-Term Investments	924.00M	948.00M	1.06B	708.00M	1.53B	2.56B
Total Debt	8.94B	8.08B	8.37B	7.95B	7.88B	8.31B
Total Liabilities	12.93B	11.75B	12.51B	12.33B	12.45B	12.43B
Stockholders Equity	3.21B	3.32B	3.01B	3.09B	3.63B	3.18B
Cash Flow
Free Cash Flow	2.85B	2.84B	3.08B	1.94B	2.26B	2.57B
Operating Cash Flow	3.28B	3.28B	3.54B	2.35B	2.56B	2.81B
Investing Cash Flow	-417.00M	-144.00M	-403.00M	-110.00M	-984.00M	-214.00M
Financing Cash Flow	-2.87B	-3.19B	-2.78B	-3.00B	-2.56B	-2.05B

Illinois Tool Works Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 243.97
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ITW, the sentiment is Negative. The current price of 243.97 is below the 20-day moving average (MA) of 246.81, below the 50-day MA of 252.91, and below the 200-day MA of 249.86, indicating a bearish trend. The MACD of -2.27 indicates Negative momentum. The RSI at 41.62 is Neutral, neither overbought nor oversold. The STOCH value of 56.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ITW.

Illinois Tool Works Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ETN	78 Outperform	$136.87B	35.24	20.69%	1.18%	8.24%	6.21%
PH	77 Outperform	$104.98B	29.63	27.30%	0.85%	0.22%	26.66%
ITW	71 Outperform	$70.78B	23.68	91.71%	2.52%	-0.41%	-10.88%
EMR	71 Outperform	$71.67B	31.53	10.91%	1.68%	2.97%	18.14%
ROK	71 Outperform	$42.34B	49.20	24.24%	1.41%	0.98%	-7.51%
ROP	71 Outperform	$48.38B	30.99	8.16%	0.74%	13.95%	6.80%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Illinois Tool Works Corporate Events

Illinois Tool Works’ Resilient Q3 2025 Earnings Call

Illinois Tool Works (ITW) recently held its earnings call, revealing a mixed sentiment as the company navigates a challenging demand environment. While ITW showcased robust financial results, particularly in the automotive and welding segments, it continues to grapple with difficulties in other areas like construction and polymers & fluids, which faced revenue declines.

Illinois Tool Works Reports Record Q2 2025 Results

Illinois Tool Works Inc. (ITW) is a global multi-industrial manufacturing leader, operating across seven industry-leading segments to deliver innovative, customer-focused solutions with best-in-class margins and returns. The company is known for its decentralized and entrepreneurial culture, supported by approximately 44,000 employees worldwide.

Illinois Tool Works Shines in Earnings Call

Illinois Tool Works (ITW) recently held its earnings call, showcasing a robust financial performance despite challenging market conditions. The company reported significant growth in China and improvements in key segments like Automotive OEM and Welding. Despite facing hurdles in North America and Europe, and a softer construction market, ITW’s strategic initiatives and raised guidance suggest a positive outlook.