ILLINOIS TOOL WORKS (ITW) Fundamental Analysis & Valuation

NYSE:ITW • US4523081093

Current stock price

259.04 USD
-2.33 (-0.89%)
At close:
259.04 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.
  • In the past year ITW had a positive cash flow from operations.
  • ITW had positive earnings in each of the past 5 years.
  • In the past 5 years ITW always reported a positive cash flow from operatings.
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 Return On Assets of 18.99%. This is amongst the best in the industry. ITW outperforms 97.71% of its industry peers.
  • With an excellent Return On Equity value of 95.07%, ITW belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
  • The Return On Invested Capital of ITW (26.75%) is better 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 10.17%.
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.
  • ITW's Profit Margin has improved in the last couple of years.
  • ITW's Operating Margin of 26.28% is amongst the best of the industry. ITW outperforms 97.71% of its industry peers.
  • ITW's Operating Margin has improved in the last couple of years.
  • ITW has a Gross Margin of 44.10%. This is amongst the best in the industry. ITW outperforms 82.44% 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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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
  • Compared to 5 years ago, ITW has less shares outstanding
  • 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

  • ITW has an Altman-Z score of 8.05. This indicates that ITW is financially healthy and has little risk of bankruptcy at the moment.
  • ITW has a Altman-Z score of 8.05. This is amongst the best in the industry. ITW outperforms 92.37% 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.
  • ITW has a Debt to FCF ratio of 3.31. This is in the better half of the industry: ITW outperforms 65.65% of its industry peers.
  • A Debt/Equity ratio of 2.47 is on the high side and indicates that ITW has dependencies on debt financing.
  • Looking at the Debt to Equity ratio, with a value of 2.47, ITW is doing worse than 87.02% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 2.47
Debt/FCF 3.31
Altman-Z 8.05
ROIC/WACC2.7
WACC9.92%
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 has a worse Current ratio (1.21) than 81.68% of its industry peers.
  • ITW has a Quick Ratio of 1.21. This is a bad value and indicates that ITW is not financially healthy enough and could expect problems in meeting its short term obligations.
  • The Quick ratio of ITW (0.89) is worse than 71.76% 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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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%.
  • ITW shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.61% yearly.
  • ITW shows a small growth in Revenue. In the last year, the Revenue has grown by 0.92%.
  • 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

  • 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.
  • The Revenue is expected to grow by 4.41% on average over the next years.
EPS Next Y8.4%
EPS Next 2Y7.97%
EPS Next 3Y7.44%
EPS Next 5Y8.86%
Revenue Next Year3.39%
Revenue Next 2Y3.44%
Revenue Next 3Y3.4%
Revenue Next 5Y4.41%

3.3 Evolution

  • The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
  • 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

  • With a Price/Earnings ratio of 24.69, ITW is valued on the expensive side.
  • ITW's Price/Earnings is on the same level as the industry average.
  • Compared to an average S&P500 Price/Earnings ratio of 24.88, ITW is valued at the same level.
  • Based on the Price/Forward Earnings ratio of 22.78, the valuation of ITW can be described as rather expensive.
  • ITW's Price/Forward Earnings ratio is in line with the industry average.
  • ITW's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.19.
Industry RankSector Rank
PE 24.69
Fwd PE 22.78
ITW Price Earnings VS Forward Price EarningsITW Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20

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 27.58
EV/EBITDA 17.81
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.
  • ITW has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.94
PEG (5Y)2.57
EPS Next 2Y7.97%
EPS Next 3Y7.44%

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

8

5. ITW Dividend Analysis

5.1 Amount

  • With a Yearly Dividend Yield of 2.46%, ITW has a reasonable but not impressive dividend return.
  • ITW's Dividend Yield is rather good when compared to the industry average which is at 1.22. ITW pays more dividend than 90.08% of the companies in the same industry.
  • ITW's Dividend Yield is a higher than the S&P500 average which is at 1.90.
Industry RankSector Rank
Dividend Yield 2.46%

5.2 History

  • On average, the dividend of ITW grows each year by 7.19%, which is quite nice.
  • ITW has paid a dividend for at least 10 years, which is 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 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

  • 58.22% 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 2Y7.97%
EPS Next 3Y7.44%
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 (3/27/2026, 8:26:51 PM)

After market: 259.04 0 (0%)

259.04

-2.33 (-0.89%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)02-03
Earnings (Next)04-28
Inst Owners85.81%
Inst Owner Change0.72%
Ins Owners0.25%
Ins Owner Change-6.28%
Market Cap74.66B
Revenue(TTM)16.04B
Net Income(TTM)3.07B
Analysts52.31
Price Target281.86 (8.81%)
Short Float %3.2%
Short Ratio6.06
Dividend
Industry RankSector Rank
Dividend Yield 2.46%
Yearly Dividend6.13
Dividend Growth(5Y)7.19%
DP58.22%
Div Incr Years29
Div Non Decr Years29
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)5.41%
PT rev (3m)6.01%
EPS NQ rev (1m)0.07%
EPS NQ rev (3m)0.52%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)-0.07%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.15%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-0.04%
Valuation
Industry RankSector Rank
PE 24.69
Fwd PE 22.78
P/S 4.65
P/FCF 27.58
P/OCF 23.88
P/B 23.15
P/tB N/A
EV/EBITDA 17.81
EPS(TTM)10.49
EY4.05%
EPS(NY)11.37
Fwd EY4.39%
FCF(TTM)9.39
FCFY3.63%
OCF(TTM)10.85
OCFY4.19%
SpS55.67
BVpS11.19
TBVpS-8.55
PEG (NY)2.94
PEG (5Y)2.57
Graham Number51.39
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 8.05
F-Score5
WACC9.92%
ROIC/WACC2.7
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 Y8.4%
EPS Next 2Y7.97%
EPS Next 3Y7.44%
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 2Y3.44%
Revenue Next 3Y3.4%
Revenue Next 5Y4.41%
EBIT growth 1Y-1.13%
EBIT growth 3Y3.61%
EBIT growth 5Y7.9%
EBIT Next Year15.3%
EBIT Next 3Y8.07%
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.


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 24.69 and the Price/Book (PB) ratio is 23.15.


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 58.22%.