ITW Stock Analysis — Illinois Tool Works
Sector: Industrials
AI Verdict
ITW trades at 22.4x next year's earnings for 10% expected growth—fair for a steady compounder with a sticky customer base, but not cheap if growth stalls.
Competitive Moat
ITW builds a moat through its decentralized operating model and proprietary 80/20 business process, allowing it to dominate niche industrial segments with high margins and customer stickiness. Its broad portfolio of engineered components and consumables makes it difficult for competitors to displace its entrenched relationships across diverse end markets.
Summary
ITW is notable for its disciplined operating model that consistently delivers profitability even with modest revenue growth.
Where It Stands
ITW returned 2.06% over the past year, sports an RSI of 49.2 (neutral), and trades at 22.4x next year's earnings versus a 20x industrials median.
Key Metrics
- RSI: 49.2 — Neutral
- Trailing P/E: 24.6x
- Forward P/E: 22.4x
- PEG Ratio: 2.01
- Earnings Growth: +0.1%
- Revenue Growth: +0.0%
- Market Cap: $76.3B
- Dividend Yield: 0.02%
- 1-Year Return: 2.06%
- 52-Week High: $303.16
- 52-Week Low: $238.82
Analyst Consensus
2 Buy · 13 Hold · 9 Sell (24 analysts)
Bull Case
Forward EPS is expected to grow 10.0% while the forward P/E of 22.4x is only slightly above the sector median, suggesting you’re not paying a huge premium for steady earnings growth.
Bear Case
If the P/E compresses from 22.4x to the 20x sector median, that would mean a roughly 11% drop in the share price even if earnings meet expectations.
Catalyst to Watch
Watch the next quarterly earnings for signs that EPS growth can accelerate beyond the 10.0% consensus, which would help justify the above-median multiple.