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ITT Inc ITT

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

ITT’s Strong Q1 Outperformance Prompts Us to Lift FVE by 8.5%

Joshua Aguilar Equity Analyst

Analyst Note

| Joshua Aguilar |

Narrow-moat rated ITT had a very strong 2021 opening with its first quarter results. First quarter revenue rose to $698.4 million, good for a 5.3% year over year increase, or 1.5% on an organic basis. Furthermore, adjusted segment operating margins rose to 17.5%, increasing 300 basis points year over year (or 530 basis points on a reported basis), while adjusted EPS of $1.06 rose 32.% year over year. Finally, free cash flow rose to $54 million, up 71% year on year thanks to ITT’s exceptional execution on the margin front, as well as lower investments in property, plant and equipment.

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Company Profile

Business Description

ITT is a diversified industrial conglomerate with nearly $3 billion in sales. After the spin-offs of Xylem and Exelis in 2011, the company’s products primarily include brake pads, shock absorbers, pumps, valves, connectors, and switches. Its customers include original-equipment and Tier 1 manufacturers as well as aftermarket customers. ITT uses a network of approximately 700 independent distributors, which accounts for about one third of overall revenue. Nearly three fourths of the company’s sales are made in North America and Europe. ITT’s primary end markets include automotive, rail, oil and gas, aerospace and defense, chemical, mining, and general industrial.

Contact
1133 Westchester Avenue
White Plains, NY, 10604
T +1 914 641-2000
Sector Industrials
Industry Specialty Industrial Machinery
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 9,700

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