Morningstar

Illinois Tool Works Inc ITW

Morningstar Rating
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Stock XNYS Rating as of
$258.41 −1.58 (0.61%)
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As of Delayed Price Post-Trading: $258.41 0.00

Company Report

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Illinois Tool Works Still Looks Overvalued Despite an Economic Moat Rating Upgrade

After taking a fresh look at the multi-industry stalwart, we’ve decreased Illinois Tool Works' fair value estimate to $203 per share from $214. The decrease in our fair value estimate is a result of hampered long-term growth expectations more than offsetting the extension of the length of time we expect ITW to generate returns above its cost of capital due to an economic moat rating upgrade from narrow to wide. We’ve maintained our Exemplary Capital Allocation Rating.

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Price vs Fair Value

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ITW is trading at a 786% premium.
Price
$259.99
Fair Value
$783.00
Uncertainty
Medium
1-Star Price
$675.39
5-Star Price
$376.60
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

ITW’s long-term incentive plan is based partially on the company’s return on invested capital, a metric we think encourages management to grow the business responsibly and efficiently.

Bears

ITW’s growth profile has not meaningfully improved from a decade ago, a period during which ITW’s organic top line grew below GDP.

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News

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Trading Information

Previous Close Price
$259.99
Day Range
$256.49–261.41
52-Week Range
$217.50–271.15
Bid/Ask
$256.25 / $259.00
Market Cap
$76.72 Bil
Volume/Avg
624,279 / 915,056

Key Statistics

Price/Earnings (Normalized)
26.13
Price/Sales
4.88
Dividend Yield (Trailing)
2.19%
Dividend Yield (Forward)
2.31%
Total Yield
4.07%

Company Profile

Founded in 1912, Illinois Tool Works has become a diversified industrial manufacturer through acquisitions and innovations that follow customer needs. ITW operates through seven business segments, with no segment representing more than one fifth of revenue. ITW’s automotive OEM segment sells vehicle components; its food equipment segment sells commercial kitchen appliances; its test & measurement and electronics segment sells inspection and analysis equipment; its welding segment sells welding equipment and consumables; its polymers & fluids segment sells industrial and consumer adhesives, solvents, and coatings; its construction products segment sells building fasteners and tools; and its specialty products segment sells medical, packaging, HVAC, and airport ground equipment.
Sector
Industrials
Industry
Specialty Industrial Machinery
Stock Style Box
Large Value
Total Number of Employees
45,000
Website
https://www.itw.com

Competitors

Valuation

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Metric
ITW
BWA
TT
Price/Earnings (Normalized)
 26.138.5037.94
Price/Book Value
 26.071.3012.58
Price/Sales
 4.880.564.72
Price/Cash Flow
 23.135.3131.60
Price/Earnings
ITW
BWA
TT

Financial Strength

Metric
ITW
BWA
TT
Quick Ratio
 0.861.190.72
Current Ratio
 1.301.621.17
Interest Coverage
 15.0137.3813.64
Quick Ratio
ITW
BWA
TT

Profitability

Metric
ITW
BWA
TT
Return on Assets (Normalized)
 20.07%6.40%12.52%
Return on Equity (Normalized)
 103.48%15.25%35.85%
Return on Invested Capital (Normalized)
 29.18%9.30%22.11%
Return on Assets
ITW
BWA
TT

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