ILLINOIS TOOL WORKS (ITW) Fundamental Analysis & Valuation

NYSE:ITW • US4523081093

282.51 USD
-4.66 (-1.62%)
At close: Mar 5, 2026
282.51 USD
0 (0%)
After Hours: 3/5/2026, 3:42:28 PM
Overview Stock Chart Technical Analysis Fundamental Analysis Forecast Earnings Financials Ownership News

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

Fundamental Rating

6

ITW gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 130 industry peers in the Machinery industry. While ITW belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. ITW is quite expensive at the moment. It does show a decent growth rate. Finally ITW also has an excellent dividend rating. These ratings could make ITW a good candidate for dividend investing.


Dividend Valuation Growth Profitability Health

9

1. ITW Profitability Analysis

1.1 Basic Checks

  • In the past year ITW was profitable.
  • ITW had a positive operating cash flow in the past year.
  • Each year in the past 5 years ITW has been profitable.
  • Of the past 5 years ITW 4 years 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

  • ITW has a better Return On Assets (18.75%) than 97.69% of its industry peers.
  • Looking at the Return On Equity, with a value of 94.33%, ITW belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
  • The Return On Invested Capital of ITW (24.43%) is better than 97.69% of its industry peers.
  • Measured over the past 3 years, the Average Return On Invested Capital for ITW is significantly above the industry average of 10.21%.
  • The last Return On Invested Capital (24.43%) for ITW is well below the 3 year average (28.88%), which needs to be investigated, but indicates that ITW had better years and this may not be a problem.
Industry RankSector Rank
ROA 18.75%
ROE 94.33%
ROIC 24.43%
ROA(3y)20.4%
ROA(5y)19.52%
ROE(3y)99.48%
ROE(5y)94.2%
ROIC(3y)28.88%
ROIC(5y)26.49%
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

  • ITW has a better Profit Margin (19.05%) than 96.15% of its industry peers.
  • In the last couple of years the Profit Margin of ITW has grown nicely.
  • Looking at the Operating Margin, with a value of 26.20%, ITW belongs to the top of the industry, outperforming 97.69% of the companies in the same industry.
  • ITW's Operating Margin has improved in the last couple of years.
  • Looking at the Gross Margin, with a value of 43.93%, ITW belongs to the top of the industry, outperforming 83.08% of the companies in the same industry.
  • In the last couple of years the Gross Margin of ITW has remained more or less at the same level.
Industry RankSector Rank
OM 26.2%
PM (TTM) 19.05%
GM 43.93%
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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5

2. ITW Health Analysis

2.1 Basic Checks

  • The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so ITW is creating value.
  • Compared to 1 year ago, ITW has less shares outstanding
  • ITW has less shares outstanding than it did 5 years ago.
  • Compared to 1 year ago, ITW has a worse debt to assets ratio.
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 8.45 indicates that ITW is not in any danger for bankruptcy at the moment.
  • ITW's Altman-Z score of 8.45 is amongst the best of the industry. ITW outperforms 93.08% of its industry peers.
  • ITW has a debt to FCF ratio of 3.14. This is a good value and a sign of high solvency as ITW would need 3.14 years to pay back of all of its debts.
  • ITW's Debt to FCF ratio of 3.14 is fine compared to the rest of the industry. ITW outperforms 64.62% of its industry peers.
  • ITW has a Debt/Equity ratio of 2.80. This is a high value indicating a heavy dependency on external financing.
  • ITW has a worse Debt to Equity ratio (2.80) than 87.69% of its industry peers.
Industry RankSector Rank
Debt/Equity 2.8
Debt/FCF 3.14
Altman-Z 8.45
ROIC/WACC2.74
WACC8.91%
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

  • ITW has a Current Ratio of 1.53. This is a normal value and indicates that ITW is financially healthy and should not expect problems in meeting its short term obligations.
  • Looking at the Current ratio, with a value of 1.53, ITW is doing worse than 73.08% of the companies in the same industry.
  • A Quick Ratio of 1.11 indicates that ITW should not have too much problems paying its short term obligations.
  • With a Quick ratio value of 1.11, ITW is not doing good in the industry: 60.77% of the companies in the same industry are doing better.
Industry RankSector Rank
Current Ratio 1.53
Quick Ratio 1.11
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

  • The Earnings Per Share has been growing slightly by 3.15% over the past year.
  • 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

  • Based on estimates for the next years, ITW will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.86% on average per year.
  • The Revenue is expected to grow by 4.41% on average over the next years.
EPS Next Y8.41%
EPS Next 2Y7.81%
EPS Next 3Y8.91%
EPS Next 5Y8.86%
Revenue Next Year3.38%
Revenue Next 2Y3.41%
Revenue Next 3Y3.37%
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.
  • When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
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

  • The Price/Earnings ratio is 26.93, which means the current valuation is very expensive for ITW.
  • Compared to the rest of the industry, the Price/Earnings ratio of ITW is on the same level as its industry peers.
  • When comparing the Price/Earnings ratio of ITW to the average of the S&P500 Index (27.03), we can say ITW is valued inline with the index average.
  • ITW is valuated rather expensively with a Price/Forward Earnings ratio of 24.84.
  • ITW's Price/Forward Earnings ratio is in line with the industry average.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 25.11, ITW is valued at the same level.
Industry RankSector Rank
PE 26.93
Fwd PE 24.84
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

  • ITW's Enterprise Value to EBITDA is on the same level as the industry average.
  • The rest of the industry has a similar Price/Free Cash Flow ratio as ITW.
Industry RankSector Rank
P/FCF 28.81
EV/EBITDA 19.75
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 an expensive valuation of the company.
  • ITW has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)3.2
PEG (5Y)2.8
EPS Next 2Y7.81%
EPS Next 3Y8.91%

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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 2.22%. Purely for dividend investing, there may be better candidates out there.
  • ITW's Dividend Yield is rather good when compared to the industry average which is at 1.13. ITW pays more dividend than 90.77% of the companies in the same industry.
  • ITW's Dividend Yield is a higher than the S&P500 average which is at 1.82.
Industry RankSector Rank
Dividend Yield 2.22%

5.2 History

  • On average, the dividend of ITW grows each year by 6.98%, which is quite nice.
  • ITW has been paying a dividend for at least 10 years, so it has a reliable track record.
  • ITW has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.98%
Div Incr Years29
Div Non Decr Years29
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

  • 58.20% 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.
DP58.2%
EPS Next 2Y7.81%
EPS Next 3Y8.91%
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

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ITW Fundamentals: All Metrics, Ratios and Statistics

ILLINOIS TOOL WORKS

NYSE:ITW (3/5/2026, 3:42:28 PM)

After market: 282.51 0 (0%)

282.51

-4.66 (-1.62%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)02-03
Earnings (Next)04-28
Inst Owners84.97%
Inst Owner Change0.36%
Ins Owners0.24%
Ins Owner Change-5.89%
Market Cap81.96B
Revenue(TTM)16.04B
Net Income(TTM)3.03B
Analysts52.31
Price Target279.29 (-1.14%)
Short Float %3.08%
Short Ratio5.99
Dividend
Industry RankSector Rank
Dividend Yield 2.22%
Yearly Dividend5.71
Dividend Growth(5Y)6.98%
DP58.2%
Div Incr Years29
Div Non Decr Years29
Ex-Date03-31
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.08%
Min EPS beat(2)-0.33%
Max EPS beat(2)2.48%
EPS beat(4)3
Avg EPS beat(4)0.83%
Min EPS beat(4)-0.33%
Max EPS beat(4)2.48%
EPS beat(8)6
Avg EPS beat(8)1.3%
EPS beat(12)10
Avg EPS beat(12)2.72%
EPS beat(16)14
Avg EPS beat(16)2.82%
Revenue beat(2)0
Avg Revenue beat(2)-0.94%
Min Revenue beat(2)-1.6%
Max Revenue beat(2)-0.27%
Revenue beat(4)0
Avg Revenue beat(4)-1.32%
Min Revenue beat(4)-2.36%
Max Revenue beat(4)-0.27%
Revenue beat(8)0
Avg Revenue beat(8)-1.71%
Revenue beat(12)1
Avg Revenue beat(12)-1.46%
Revenue beat(16)5
Avg Revenue beat(16)-0.55%
PT rev (1m)6.34%
PT rev (3m)6.75%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.08%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.02%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.05%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)-0.01%
Valuation
Industry RankSector Rank
PE 26.93
Fwd PE 24.84
P/S 5.16
P/FCF 28.81
P/OCF 25.01
P/B 25.55
P/tB N/A
EV/EBITDA 19.75
EPS(TTM)10.49
EY3.71%
EPS(NY)11.37
Fwd EY4.03%
FCF(TTM)9.81
FCFY3.47%
OCF(TTM)11.3
OCFY4%
SpS54.75
BVpS11.06
TBVpS-8.14
PEG (NY)3.2
PEG (5Y)2.8
Graham Number51.09
Profitability
Industry RankSector Rank
ROA 18.75%
ROE 94.33%
ROCE 34.67%
ROIC 24.43%
ROICexc 26.26%
ROICexgc 47.72%
OM 26.2%
PM (TTM) 19.05%
GM 43.93%
FCFM 17.91%
ROA(3y)20.4%
ROA(5y)19.52%
ROE(3y)99.48%
ROE(5y)94.2%
ROIC(3y)28.88%
ROIC(5y)26.49%
ROICexc(3y)31.54%
ROICexc(5y)28.97%
ROICexgc(3y)68.5%
ROICexgc(5y)61.67%
ROCE(3y)38.38%
ROCE(5y)35.46%
ROICexgc growth 3Y12.09%
ROICexgc growth 5Y10.24%
ROICexc growth 3Y7.34%
ROICexc growth 5Y8.51%
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-Score6
Asset Turnover0.98
Health
Industry RankSector Rank
Debt/Equity 2.8
Debt/FCF 3.14
Debt/EBITDA 1.97
Cap/Depr 109.09%
Cap/Sales 2.72%
Interest Coverage 15.13
Cash Conversion 71.9%
Profit Quality 94.02%
Current Ratio 1.53
Quick Ratio 1.11
Altman-Z 8.45
F-Score6
WACC8.91%
ROIC/WACC2.74
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)3.15%
EPS 3Y2.36%
EPS 5Y9.61%
EPS Q2Q%7.09%
EPS Next Y8.41%
EPS Next 2Y7.81%
EPS Next 3Y8.91%
EPS Next 5Y8.86%
Revenue 1Y (TTM)0.92%
Revenue growth 3Y0.23%
Revenue growth 5Y4.99%
Sales Q2Q%4.09%
Revenue Next Year3.38%
Revenue Next 2Y3.41%
Revenue Next 3Y3.37%
Revenue Next 5Y4.41%
EBIT growth 1Y-1.4%
EBIT growth 3Y3.61%
EBIT growth 5Y7.9%
EBIT Next Year15.3%
EBIT Next 3Y8.07%
EBIT Next 5Y7.1%
FCF growth 1Y3.23%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y2.21%
OCF growth 3YN/A
OCF growth 5YN/A

ILLINOIS TOOL WORKS / ITW 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.


How profitable is ILLINOIS TOOL WORKS (ITW) stock?

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


What is the valuation of ILLINOIS TOOL WORKS based on its PE and PB ratios?

The Price/Earnings (PE) ratio for ILLINOIS TOOL WORKS (ITW) is 26.93 and the Price/Book (PB) ratio is 25.55.


Is the dividend of ILLINOIS TOOL WORKS sustainable?

The dividend rating of ILLINOIS TOOL WORKS (ITW) is 8 / 10 and the dividend payout ratio is 58.2%.