Illinois Tool Works (ITW) AI Stock Analysis

• Market Cap: $76.03B
• Dividend Yield: 2.37%
• Average Volume (3M): 906.67K
• Price to Earnings (P/E): 22.8
• Beta (1Y): 0.77
• Revenue Growth: -1.40%
• EPS Growth: 11.65%
• Country: US
• Employees: 44,000
• Sector: Industrials
• Sector Strength: 89
• Industry: Industrial - Machinery
• EPS (TTM): 2.58
• Shares Outstanding: 293,000,000
• 10 Day Avg. Volume: 954,851
• 30 Day Avg. Volume: 906,671
• PEG Ratio: 84.45
• Price to Book (P/B): 23.29
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 41.78
• Enterprise Value/Market Cap: 1.08
• Enterprise Value/Revenue: 1.30
• Enterprise Value/Gross Profit: 11.94
• Enterprise Value/Ebitda: 4.16
• 1Y Price Target: $256.33
• Price Target Upside: 1.05% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

• Rating: 78 Outperform
• Price Target: $289.00 ▲(13.93%Upside)

ITW's overall stock score is bolstered by its strong financial performance and positive guidance from the latest earnings call. While the technical analysis and valuation are more moderate, the company's strategic positioning and growth potential in core segments like Automotive OEM and Welding contribute significantly to the positive outlook.

Positive Factors

Manufacturing Strategy

ITW's tariff resilience is supported by its manufacturing strategy to 'produce where we sell'.

Margin Performance

ITW’s margin performance has been very consistent, delivering 46% incremental margins since 2016.

Tariff Impact

The company highlighted minimal tariff impact for Auto OEM, which was a positive surprise.

Negative Factors

Demand Weakness

Industry data support broad demand weakness across the portfolio.

Market Exposure

The company will face headwinds to growth and margin expansion given its exposure to automotive and consumer markets, driving negative consensus revisions.

Sales Performance

Construction Products organic sales saw a decline due to weaker residential renovation demand.

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 makes money by manufacturing and selling a wide range of products and solutions across its diverse business segments. The company's revenue model is primarily based on the sale of specialized industrial equipment and consumables, which are used in various industries. Key revenue streams include the Automotive OEM segment, which provides components and fasteners for automotive manufacturers, and the Food Equipment segment, which produces cooking, refrigeration, and food processing equipment. ITW also earns significant revenue from its Test & Measurement and Electronics segment, offering testing equipment and electronics assembly solutions. The strength of ITW's business model lies in its decentralized structure, allowing its business units to operate independently and responsively in their respective markets. Additionally, ITW benefits from a strong focus on customer-driven innovation and a disciplined approach to operational efficiency, which contribute to consistent profitability and growth.

Illinois Tool Works Financial Statement Overview

Summary

Illinois Tool Works demonstrates strong profitability with high gross and net profit margins, though a slight revenue and free cash flow decline suggests areas for growth. The balance sheet shows moderate leverage, indicating room for improved equity positioning. Overall, ITW maintains robust financial health with effective cash flow management.

Income Statement

Illinois Tool Works shows a strong gross profit margin of approximately 43.5% for TTM, indicating efficiency in production. The net profit margin is robust at 21.4% for TTM, reflecting effective cost management. However, the slight revenue decline in TTM compared to 2024 suggests a need for growth strategies. EBIT and EBITDA margins remain healthy, supporting profitability.

Balance Sheet

The company's balance sheet reflects a moderate debt-to-equity ratio of 2.55 for TTM, indicating manageable but notable leverage. With a return on equity of 103.9% for TTM, ITW exhibits strong profitability relative to shareholder investment. The equity ratio of 23.1% suggests the company maintains a balanced asset structure, but there's room for improvement in equity levels.

Cash Flow

ITW delivers a solid free cash flow, though the free cash flow declined by 17.4% in TTM, compared to 2024. The operating cash flow to net income ratio of 0.8 for TTM indicates efficient cash operations, while the free cash flow to net income ratio of 0.7 highlights strong cash generation relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	15.79B	15.90B	16.11B	15.93B	14.46B	12.57B
Gross Profit	6.91B	7.04B	6.79B	6.50B	5.97B	5.20B
EBITDA	4.81B	5.11B	4.48B	4.24B	3.91B	3.32B
Net Income	3.37B	3.49B	2.96B	3.03B	2.69B	2.11B
Balance Sheet
Total Assets	14.57B	15.07B	15.52B	15.42B	16.08B	15.61B
Cash, Cash Equivalents and Short-Term Investments	788.00M	948.00M	1.06B	708.00M	1.53B	2.56B
Total Debt	8.94B	8.08B	8.37B	7.76B	7.69B	8.12B
Total Liabilities	11.36B	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	1.78B	2.84B	3.08B	1.94B	2.26B	2.57B
Operating Cash Flow	2.00B	3.28B	3.54B	2.35B	2.56B	2.81B
Investing Cash Flow	177.00M	-144.00M	-403.00M	-110.00M	-984.00M	-214.00M
Financing Cash Flow	-2.06B	-3.19B	-2.78B	-3.00B	-2.56B	-2.05B

Illinois Tool Works Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 253.67
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ITW, the sentiment is Neutral. The current price of 253.67 is below the 20-day moving average (MA) of 258.37, above the 50-day MA of 249.98, and above the 200-day MA of 252.23, indicating a neutral trend. The MACD of 2.61 indicates Positive momentum. The RSI at 47.07 is Neutral, neither overbought nor oversold. The STOCH value of 47.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ITW.

Illinois Tool Works Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ITW	78 Outperform	$76.03B	22.77	109.06%	2.37%	-1.40%	11.65%
HWM	78 Outperform	$76.36B	61.68	28.29%	0.19%	10.01%	47.87%
PH	77 Outperform	$93.90B	28.29	27.16%	0.91%	-0.23%	22.41%
ROP	73 Outperform	$60.54B	39.57	8.15%	0.58%	13.59%	6.52%
EMR	69 Neutral	$83.03B	35.23	9.82%	1.44%	6.49%	24.14%
ROK	69 Neutral	$39.89B	44.56	25.86%	1.47%	-11.19%	-22.50%
Sector *	65 Neutral	$11.04B	15.74	4.60%	2.11%	3.27%	-26.87%

Illinois Tool Works Corporate Events

Illinois Tool Works Elects Directors at Annual Meeting

On May 2, 2025, Illinois Tool Works Inc. held its annual stockholders meeting, where all twelve director nominees were elected. Additionally, the advisory vote on executive compensation was approved, and Deloitte & Touche LLP was ratified as the independent registered public accounting firm for 2025. However, a stockholder proposal for requiring ratification of executive termination pay was defeated.