Analyst Note| Joshua Aguilar |
After reviewing narrow-moat rated Illinois Tool Works’ latest results, nothing materially alters our long-term view. While fourth-quarter sales, operating margins, and earnings outpaced our expectations, particularly on the margin front, free cash flow came in slightly under. That’s not surprising given working capital tends to be pro-cyclical. While full-year operating earnings exceeded our expectations, management’s 2021 guide came in slightly below our expectations, particularly in the organic revenue guide within ITW’s auto OEM, welding, and constructions products segments.