ILLINOIS TOOL WORKS (ITW) Fundamental Analysis & Valuation

NYSE:ITW • US4523081093

Current stock price

269.135 USD
-0.16 (-0.06%)
Last:

This ITW fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

9

1. ITW Profitability Analysis

1.1 Basic Checks

  • ITW had positive earnings in the past year.
  • ITW had a positive operating cash flow in the past year.
  • Each year in the past 5 years ITW has been profitable.
  • Each year in the past 5 years ITW had a positive operating cash flow.
ITW Yearly Net Income VS EBIT VS OCF VS FCFITW Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B 4B

1.2 Ratios

  • Looking at the Return On Assets, with a value of 18.99%, ITW belongs to the top of the industry, outperforming 98.47% of the companies in the same industry.
  • ITW has a Return On Equity of 95.07%. This is amongst the best in the industry. ITW outperforms 100.00% of its industry peers.
  • ITW has a better Return On Invested Capital (26.75%) than 97.71% of its industry peers.
  • The Average Return On Invested Capital over the past 3 years for ITW is significantly above the industry average of 10.02%.
Industry RankSector Rank
ROA 18.99%
ROE 95.07%
ROIC 26.75%
ROA(3y)20.4%
ROA(5y)19.52%
ROE(3y)99.48%
ROE(5y)94.2%
ROIC(3y)27.84%
ROIC(5y)25.87%
ITW Yearly ROA, ROE, ROICITW Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20 40 60 80 100

1.3 Margins

  • Looking at the Profit Margin, with a value of 19.11%, ITW belongs to the top of the industry, outperforming 94.66% of the companies in the same industry.
  • ITW's Profit Margin has improved in the last couple of years.
  • Looking at the Operating Margin, with a value of 26.28%, ITW belongs to the top of the industry, outperforming 97.71% of the companies in the same industry.
  • In the last couple of years the Operating Margin of ITW has grown nicely.
  • ITW has a Gross Margin of 44.10%. This is amongst the best in the industry. ITW outperforms 81.68% of its industry peers.
  • ITW's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 26.28%
PM (TTM) 19.11%
GM 44.1%
OM growth 3Y3.37%
OM growth 5Y2.77%
PM growth 3Y0.12%
PM growth 5Y2.64%
GM growth 3Y2.61%
GM growth 5Y1.3%
ITW Yearly Profit, Operating, Gross MarginsITW Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10 20 30 40

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ROAROEROICOperating and Profit MarginShow most profitable peers

5

2. ITW Health Analysis

2.1 Basic Checks

  • With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ITW is creating value.
  • The number of shares outstanding for ITW has been reduced compared to 1 year ago.
  • The number of shares outstanding for ITW has been reduced compared to 5 years ago.
  • The debt/assets ratio for ITW is higher compared to a year ago.
ITW Yearly Shares OutstandingITW Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 100M 200M 300M
ITW Yearly Total Debt VS Total AssetsITW Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5B 10B 15B

2.2 Solvency

  • An Altman-Z score of 8.15 indicates that ITW is not in any danger for bankruptcy at the moment.
  • With an excellent Altman-Z score value of 8.15, ITW belongs to the best of the industry, outperforming 91.60% of the companies in the same industry.
  • The Debt to FCF ratio of ITW is 3.31, which is a good value as it means it would take ITW, 3.31 years of fcf income to pay off all of its debts.
  • ITW has a better Debt to FCF ratio (3.31) than 65.65% of its industry peers.
  • ITW has a Debt/Equity ratio of 2.47. This is a high value indicating a heavy dependency on external financing.
  • The Debt to Equity ratio of ITW (2.47) is worse than 87.02% of its industry peers.
Industry RankSector Rank
Debt/Equity 2.47
Debt/FCF 3.31
Altman-Z 8.15
ROIC/WACC2.62
WACC10.2%
ITW Yearly LT Debt VS Equity VS FCFITW Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2B 4B 6B

2.3 Liquidity

  • A Current Ratio of 1.21 indicates that ITW should not have too much problems paying its short term obligations.
  • ITW's Current ratio of 1.21 is on the low side compared to the rest of the industry. ITW is outperformed by 81.68% of its industry peers.
  • A Quick Ratio of 0.89 indicates that ITW may have some problems paying its short term obligations.
  • ITW has a Quick ratio of 0.89. This is in the lower half of the industry: ITW underperforms 74.05% of its industry peers.
Industry RankSector Rank
Current Ratio 1.21
Quick Ratio 0.89
ITW Yearly Current Assets VS Current LiabilitesITW Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2B 4B 6B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

4

3. ITW Growth Analysis

3.1 Past

  • ITW shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.15%.
  • Measured over the past years, ITW shows a quite strong growth in Earnings Per Share. The EPS has been growing by 9.61% on average per year.
  • The Revenue has been growing slightly by 0.92% in the past year.
  • Measured over the past years, ITW shows a small growth in Revenue. The Revenue has been growing by 4.99% on average per year.
EPS 1Y (TTM)3.15%
EPS 3Y2.36%
EPS 5Y9.61%
EPS Q2Q%7.09%
Revenue 1Y (TTM)0.92%
Revenue growth 3Y0.23%
Revenue growth 5Y4.99%
Sales Q2Q%4.09%

3.2 Future

  • The Earnings Per Share is expected to grow by 8.86% on average over the next years. This is quite good.
  • Based on estimates for the next years, ITW will show a small growth in Revenue. The Revenue will grow by 4.41% on average per year.
EPS Next Y8.39%
EPS Next 2Y7.95%
EPS Next 3Y7.43%
EPS Next 5Y8.86%
Revenue Next Year3.39%
Revenue Next 2Y3.41%
Revenue Next 3Y3.4%
Revenue Next 5Y4.41%

3.3 Evolution

  • When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
  • The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
ITW Yearly Revenue VS EstimatesITW Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 5B 10B 15B 20B
ITW Yearly EPS VS EstimatesITW Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 5 10 15

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3

4. ITW Valuation Analysis

4.1 Price/Earnings Ratio

  • ITW is valuated quite expensively with a Price/Earnings ratio of 25.66.
  • The rest of the industry has a similar Price/Earnings ratio as ITW.
  • The average S&P500 Price/Earnings ratio is at 27.42. ITW is around the same levels.
  • With a Price/Forward Earnings ratio of 23.67, ITW is valued on the expensive side.
  • The rest of the industry has a similar Price/Forward Earnings ratio as ITW.
  • ITW is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.29, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 25.66
Fwd PE 23.67
ITW Price Earnings VS Forward Price EarningsITW Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

  • Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ITW is on the same level as its industry peers.
  • ITW's Price/Free Cash Flow is on the same level as the industry average.
Industry RankSector Rank
P/FCF 28.64
EV/EBITDA 18.3
ITW Per share dataITW EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 20 40

4.3 Compensation for Growth

  • The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ITW does not grow enough to justify the current Price/Earnings ratio.
  • The excellent profitability rating of ITW may justify a higher PE ratio.
PEG (NY)3.06
PEG (5Y)2.67
EPS Next 2Y7.95%
EPS Next 3Y7.43%

More info and screens

Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

8

5. ITW Dividend Analysis

5.1 Amount

  • ITW has a Yearly Dividend Yield of 2.36%. Purely for dividend investing, there may be better candidates out there.
  • Compared to an average industry Dividend Yield of 1.13, ITW pays a better dividend. On top of this ITW pays more dividend than 90.84% of the companies listed in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.81, ITW pays a bit more dividend than the S&P500 average.
Industry RankSector Rank
Dividend Yield 2.36%

5.2 History

  • The dividend of ITW is nicely growing with an annual growth rate of 7.19%!
  • ITW has been paying a dividend for at least 10 years, so it has a reliable track record.
  • ITW has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)7.19%
Div Incr Years30
Div Non Decr Years30
ITW Yearly Dividends per shareITW Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2 4 6

5.3 Sustainability

  • 58.22% of the earnings are spent on dividend by ITW. This is a bit on the high side, but may be sustainable.
  • ITW's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP58.22%
EPS Next 2Y7.95%
EPS Next 3Y7.43%
ITW Yearly Income VS Free CF VS DividendITW Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B
ITW Dividend Payout.ITW Dividend Payout, showing the Payout Ratio.ITW Dividend Payout.PayoutRetained Earnings

More info and screens

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ITW Fundamentals: All Metrics, Ratios and Statistics

ILLINOIS TOOL WORKS

NYSE:ITW (4/27/2026, 1:24:39 PM)

269.135

-0.16 (-0.06%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)02-03
Earnings (Next)04-30
Inst Owners85.83%
Inst Owner Change-0.35%
Ins Owners0.28%
Ins Owner Change-6.28%
Market Cap77.53B
Revenue(TTM)16.04B
Net Income(TTM)3.07B
Analysts52.31
Price Target277.62 (3.15%)
Short Float %3.33%
Short Ratio6.46
Dividend
Industry RankSector Rank
Dividend Yield 2.36%
Yearly Dividend6.13
Dividend Growth(5Y)7.19%
DP58.22%
Div Incr Years30
Div Non Decr Years30
Ex-Date03-31
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.41%
Min EPS beat(2)0.34%
Max EPS beat(2)2.48%
EPS beat(4)3
Avg EPS beat(4)0.74%
Min EPS beat(4)-0.33%
Max EPS beat(4)2.48%
EPS beat(8)7
Avg EPS beat(8)1.43%
EPS beat(12)10
Avg EPS beat(12)1.64%
EPS beat(16)14
Avg EPS beat(16)2.75%
Revenue beat(2)0
Avg Revenue beat(2)-0.99%
Min Revenue beat(2)-1.6%
Max Revenue beat(2)-0.39%
Revenue beat(4)0
Avg Revenue beat(4)-0.83%
Min Revenue beat(4)-1.6%
Max Revenue beat(4)-0.27%
Revenue beat(8)0
Avg Revenue beat(8)-1.56%
Revenue beat(12)0
Avg Revenue beat(12)-1.59%
Revenue beat(16)4
Avg Revenue beat(16)-0.75%
PT rev (1m)-0.6%
PT rev (3m)5.71%
EPS NQ rev (1m)-0.04%
EPS NQ rev (3m)0.36%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)-0.02%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)0.27%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.05%
Valuation
Industry RankSector Rank
PE 25.66
Fwd PE 23.67
P/S 4.83
P/FCF 28.64
P/OCF 24.8
P/B 24.04
P/tB N/A
EV/EBITDA 18.3
EPS(TTM)10.49
EY3.9%
EPS(NY)11.37
Fwd EY4.22%
FCF(TTM)9.4
FCFY3.49%
OCF(TTM)10.85
OCFY4.03%
SpS55.69
BVpS11.19
TBVpS-8.55
PEG (NY)3.06
PEG (5Y)2.67
Graham Number51.4029 (-80.9%)
Profitability
Industry RankSector Rank
ROA 18.99%
ROE 95.07%
ROCE 38.25%
ROIC 26.75%
ROICexc 28.73%
ROICexgc 57.07%
OM 26.28%
PM (TTM) 19.11%
GM 44.1%
FCFM 16.87%
ROA(3y)20.4%
ROA(5y)19.52%
ROE(3y)99.48%
ROE(5y)94.2%
ROIC(3y)27.84%
ROIC(5y)25.87%
ROICexc(3y)30.33%
ROICexc(5y)28.24%
ROICexgc(3y)63.03%
ROICexgc(5y)58.4%
ROCE(3y)38.38%
ROCE(5y)35.46%
ROICexgc growth 3Y3.05%
ROICexgc growth 5Y4.81%
ROICexc growth 3Y3.16%
ROICexc growth 5Y5.95%
OM growth 3Y3.37%
OM growth 5Y2.77%
PM growth 3Y0.12%
PM growth 5Y2.64%
GM growth 3Y2.61%
GM growth 5Y1.3%
F-Score5
Asset Turnover0.99
Health
Industry RankSector Rank
Debt/Equity 2.47
Debt/FCF 3.31
Debt/EBITDA 1.73
Cap/Depr 105.54%
Cap/Sales 2.61%
Interest Coverage 15.11
Cash Conversion 67.77%
Profit Quality 88.29%
Current Ratio 1.21
Quick Ratio 0.89
Altman-Z 8.15
F-Score5
WACC10.2%
ROIC/WACC2.62
Cap/Depr(3y)109.81%
Cap/Depr(5y)100.42%
Cap/Sales(3y)2.73%
Cap/Sales(5y)2.56%
Profit Quality(3y)91.37%
Profit Quality(5y)84.37%
High Growth Momentum
Growth
EPS 1Y (TTM)3.15%
EPS 3Y2.36%
EPS 5Y9.61%
EPS Q2Q%7.09%
EPS Next Y8.39%
EPS Next 2Y7.95%
EPS Next 3Y7.43%
EPS Next 5Y8.86%
Revenue 1Y (TTM)0.92%
Revenue growth 3Y0.23%
Revenue growth 5Y4.99%
Sales Q2Q%4.09%
Revenue Next Year3.39%
Revenue Next 2Y3.41%
Revenue Next 3Y3.4%
Revenue Next 5Y4.41%
EBIT growth 1Y-1.13%
EBIT growth 3Y3.61%
EBIT growth 5Y7.9%
EBIT Next Year15.25%
EBIT Next 3Y8.08%
EBIT Next 5Y7.1%
FCF growth 1Y-4.82%
FCF growth 3Y11.82%
FCF growth 5Y1.04%
OCF growth 1Y-4.72%
OCF growth 3Y10.01%
OCF growth 5Y2.18%

ILLINOIS TOOL WORKS / ITW Fundamental Analysis FAQ

What is the ChartMill fundamental rating of ILLINOIS TOOL WORKS (ITW) stock?

ChartMill assigns a fundamental rating of 6 / 10 to ITW.


Can you provide the valuation status for ILLINOIS TOOL WORKS?

ChartMill assigns a valuation rating of 3 / 10 to ILLINOIS TOOL WORKS (ITW). This can be considered as Overvalued.


Can you provide the profitability details for ILLINOIS TOOL WORKS?

ILLINOIS TOOL WORKS (ITW) has a profitability rating of 9 / 10.


What is the financial health of ILLINOIS TOOL WORKS (ITW) stock?

The financial health rating of ILLINOIS TOOL WORKS (ITW) is 5 / 10.


Can you provide the dividend sustainability for ITW stock?

The dividend rating of ILLINOIS TOOL WORKS (ITW) is 8 / 10 and the dividend payout ratio is 58.22%.