ILLINOIS TOOL WORKS (ITW) Fundamental Analysis & Valuation

NYSE:ITW • US4523081093

Current stock price

271.05 USD
-1.63 (-0.6%)
At close:
271.05 USD
0 (0%)
After Hours:

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

  • In the past year ITW was profitable.
  • ITW had a positive operating cash flow in the past year.
  • In the past 5 years ITW has always 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

  • The Return On Assets of ITW (18.99%) is better than 98.47% of its industry peers.
  • The Return On Equity of ITW (95.07%) is better than 100.00% of its industry peers.
  • Looking at the Return On Invested Capital, with a value of 26.75%, ITW belongs to the top of the industry, outperforming 97.71% of the companies in the same industry.
  • Measured over the past 3 years, the Average Return On Invested Capital for ITW is significantly above the industry average of 10.00%.
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

  • With an excellent Profit Margin value of 19.11%, ITW belongs to the best of the industry, outperforming 95.42% of the companies in the same industry.
  • In the last couple of years the Profit Margin of ITW has grown nicely.
  • With an excellent Operating Margin value of 26.28%, ITW belongs to the best of the industry, outperforming 97.71% of the companies in the same industry.
  • ITW's Operating Margin has improved in the last couple of years.
  • With an excellent Gross Margin value of 44.10%, ITW belongs to the best of the industry, outperforming 82.44% of the companies in the same industry.
  • 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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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.
  • 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 8.20 indicates that ITW is not in any danger for bankruptcy at the moment.
  • ITW's Altman-Z score of 8.20 is amongst the best of the industry. ITW outperforms 91.60% of its industry peers.
  • 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.
  • Looking at the Debt to FCF ratio, with a value of 3.31, ITW is in the better half of the industry, outperforming 65.65% of the companies in the same industry.
  • A Debt/Equity ratio of 2.47 is on the high side and indicates that ITW has dependencies on debt financing.
  • ITW has a worse Debt to Equity ratio (2.47) than 87.02% of its industry peers.
Industry RankSector Rank
Debt/Equity 2.47
Debt/FCF 3.31
Altman-Z 8.2
ROIC/WACC2.66
WACC10.07%
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.
  • Looking at the Quick ratio, with a value of 0.89, ITW is doing worse than 73.28% of the companies in the same industry.
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

  • The Earnings Per Share has been growing slightly by 3.15% over the past year.
  • ITW shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.61% yearly.
  • The Revenue has been growing slightly by 0.92% in the past year.
  • ITW shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.99% yearly.
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

  • ITW is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.86% yearly.
  • ITW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.41% yearly.
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

  • The Price/Earnings ratio is 25.84, which means the current valuation is very expensive for ITW.
  • The rest of the industry has a similar Price/Earnings ratio as ITW.
  • When comparing the Price/Earnings ratio of ITW to the average of the S&P500 Index (27.95), we can say ITW is valued inline with the index average.
  • Based on the Price/Forward Earnings ratio of 23.84, the valuation of ITW can be described as rather expensive.
  • ITW's Price/Forward Earnings is on the same level as the industry average.
  • ITW is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 38.68, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 25.84
Fwd PE 23.84
ITW Price Earnings VS Forward Price EarningsITW Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

  • ITW's Enterprise Value to EBITDA is on the same level as the industry average.
  • ITW's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 28.85
EV/EBITDA 18.51
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)3.08
PEG (5Y)2.69
EPS Next 2Y7.95%
EPS Next 3Y7.43%

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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 2.42%. 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 1.08. ITW pays more dividend than 90.84% of the companies 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 2.42%

5.2 History

  • On average, the dividend of ITW grows each year by 7.19%, 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 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

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ITW Fundamentals: All Metrics, Ratios and Statistics

ILLINOIS TOOL WORKS

NYSE:ITW (4/21/2026, 3:42:28 PM)

After market: 271.05 0 (0%)

271.05

-1.63 (-0.6%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)02-03
Earnings (Next)04-30
Inst Owners85.83%
Inst Owner Change-0.33%
Ins Owners0.28%
Ins Owner Change-6.28%
Market Cap78.08B
Revenue(TTM)16.04B
Net Income(TTM)3.07B
Analysts52.31
Price Target277.62 (2.42%)
Short Float %3.33%
Short Ratio6.46
Dividend
Industry RankSector Rank
Dividend Yield 2.42%
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)0.54%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)0.03%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)0.27%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.01%
Valuation
Industry RankSector Rank
PE 25.84
Fwd PE 23.84
P/S 4.87
P/FCF 28.85
P/OCF 24.98
P/B 24.21
P/tB N/A
EV/EBITDA 18.51
EPS(TTM)10.49
EY3.87%
EPS(NY)11.37
Fwd EY4.19%
FCF(TTM)9.4
FCFY3.47%
OCF(TTM)10.85
OCFY4%
SpS55.69
BVpS11.19
TBVpS-8.55
PEG (NY)3.08
PEG (5Y)2.69
Graham Number51.4029 (-81.04%)
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 8.2
F-Score5
WACC10.07%
ROIC/WACC2.66
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%.