Illinois Tool Works Inc (ITW) stock analysis

P/E against its history

Not enough price and earnings history to compare.

P/E against the industry

Needs positive earnings and enough profitable companies in the industry.

EV/EBITDA above its 5-year median

Illinois Tool Works's EV/EBITDA of 20.4 is above its 5-year median of 20.2.

P/S above the industry

Illinois Tool Works's price-to-sales of 4.91 is above the General Industrial Machinery and Equipment median of 2.95 (book value is negative, so we use sales).

Trading above fair value

The share price of $287.52 is above our fair value estimate of $221.88.

Margin of safety under 20%

The price is 29.6% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 0.2% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 2.4% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew 4.8% over the last twelve months; the General Industrial Machinery and Equipment median is 12.4%.

Guidance raised

Illinois Tool Works raised its full year 2026 GAAP EPS outlook on Jul 28, 2026.

Gross margin improving

Gross margin was 53.1% over the last twelve months, against 52.7% a year earlier.

Return on equity

Needs positive equity and five years of results.

Return on invested capital

Needs operating income and invested capital.

Return on equity against the industry

Needs positive equity.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin against its history

Needs five years of revenue and net income.

Net margin against the industry

Needs revenue and net income.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 34.8% of total debt.

Interest well covered

Operating income covers interest expense 14.3 times.

Short-term assets cover short-term debts

Current assets are 1.29 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 8.32; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Illinois Tool Works paid dividends worth 2.3% of the share price over the last twelve months.

Yield below Treasuries

The 2.3% yield is below the 4.7% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Illinois Tool Works yields 2.3%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Earnings cover

Needs dividends paid and net income.

Covered by free cash flow

Dividends take 64.6% of free cash flow.