Illinois Tool Works (ITW) posted net profit margins of 21.3%, up from 19.2% a year ago, while delivering earnings growth of 9.7% this year, above its 5-year average growth rate of 9.1% annually. Forecasts call for future earnings growth of 6.7% per year and revenue growth of 3.7%, both trailing the broader US market’s expectations. Trading at $245.75, ITW’s shares sit below the estimated fair value and the company stands out for maintaining strong profitability and attractive valuation ratios, even as its growth rates lag the averages.
See our full analysis for Illinois Tool Works.
Now, let’s see how these latest figures measure up against the big-picture narratives that investors follow. Some expectations may get confirmed, while others could be challenged.
See what the community is saying about Illinois Tool Works
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Net profit margins climbed to 21.3%, exceeding last year’s 19.2% and demonstrating resilience against margin pressure that has challenged much of the US Machinery industry.
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Analysts’ consensus view emphasizes that ITW’s strategy of decentralized operations and customer-backed innovation is helping it weather market turbulence.
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Margin gains complement a 9.1% annual growth in earnings over the last five years, highlighting the company’s ability to defend profitability even while revenue growth is forecast at just 3.7%. This is well below the broader market’s 10% average.
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Even as organic growth dipped 1.6% and total revenue fell 3.4% in the first quarter, profitability initiatives such as “produce where we sell” are credited with limiting tariff impacts and directly supporting margin strength.
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Consensus analysts see these moves as key to maintaining strong profitability despite revenue headwinds, with further margin expansion possible through ongoing enterprise initiatives.
See how this margin performance frames the overall bull and bear arguments in the full consensus narrative. 📊 Read the full Illinois Tool Works Consensus Narrative.
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Trading at $245.75, ITW’s price-to-earnings ratio of 21.3x stands below the US Machinery industry average of 24.7x and well below the peer average of 37.7x. This suggests shares offer relative value in a sector where peers often trade at premiums.
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According to the consensus narrative, the current price sits not only below the estimated DCF fair value of $582.03 but also under the analysts’ price target of $258.75.
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This gap heavily supports the consensus case that ITW is undervalued, given its high earnings quality rating and a history of both profit and revenue growth even as forecasts trail the industry.
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With only minor risk flagged in the financial position, consensus analysts see few near-term threats to ITW’s valuation case unless slow growth unexpectedly accelerates or margin trends reverse.
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