Skip to Content

Illinois Tool Works Inc ITW

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

ITW Posts Solid Q3 Results Despite the Difficult Operating Environment; Maintaining FVE

Joshua Aguilar Senior Analyst

Analyst Note

| Joshua Aguilar |

After reviewing narrow-moat-rated ITW’s third-quarter results, nothing in these numbers materially alters our long-term view of the firm. While we modestly reduced our 2021 full-year sales and EPS projections by 2% and 5%, respectively, time value of money more than offset any fair value impact in our model. Therefore, we maintain our fair value estimate of $183. We now expect that full-year sales will increase nearly 14% to $14.3 billion (or nearly 12% on an organic basis), and for GAAP EPS to increase about 27% to $8.48. Furthermore, we expect free cash flow conversion of about 90%, implying free cash flow of $2.4 billion.

Read Full Analysis

Company Profile

Business Description

Illinois Tool Works is a diversified global manufacturer that produces specialized industrial equipment, consumables, and related services. The firm operates 87 global divisions through seven distinct operating segments: automotive OEM, construction products, food equipment, specialty products, test/measurement and electronics, polymers and fluids, and welding. About half of its revenue comes from its operations in North America, with the remainder originating from international markets. ITW takes a bottom-up and decentralized approach to portfolio management, with the exception that each segment must apply its 80/20 operating process modeled on the Pareto principle.

Contact
155 Harlem Avenue
Glenview, IL, 60025
T +1 847 724-7500
Sector Industrials
Industry Specialty Industrial Machinery
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 43,000

Related