Illinois Tool Works Inc. (ITW) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Lam Research Corp.

Trane Technologies Plc

Applied Materials, Inc.

Parker-Hannifin Corp.

Xylem, Inc.

Dover Corp.

Johnson Controls International Plc

GE Aerospace

Illinois Tool Works Inc.

Ingersoll Rand, Inc.

Carrier Global Corp.

Why is Illinois Tool Works Inc. ?

High Management Efficiency with a high ROCE of 37.01%

Poor long term growth as Operating profit has grown by an annual rate 7.17% of over the last 5 years

Flat results in Jun 25

CASH AND EQV(HY) Lowest at USD 1,661 MM
DEBTORS TURNOVER RATIO(HY) Lowest at 4.81 times

With ROCE of 38.45%, it has a very expensive valuation with a 13.02 Enterprise value to Capital Employed

The stock is trading at a discount compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -5.70%, its profits have risen by 10% ; the PEG ratio of the company is 3.2

Consistent Underperformance against the benchmark over the last 3 years

Along with generating -5.70% returns in the last 1 year, the stock has also underperformed S&P 500 in each of the last 3 annual periods

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Illinois Tool Works Inc. should be less than 10%
Overall Portfolio exposure to Auto Components & Equipments should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Auto Components & Equipments)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Illinois Tool Works Inc. for you?

Low Risk, Low Return

Absolute

Risk Adjusted

Volatility

Illinois Tool Works Inc.

4.23%

0.33

22.83%

S&P 500

13.68%

0.70

20.15%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

4.99%

EBIT Growth (5y)

7.90%

EBIT to Interest (avg)

15.97

Debt to EBITDA (avg)

1.64

Net Debt to Equity (avg)

2.28

Sales to Capital Employed (avg)

1.38

Tax Ratio

20.64%

Dividend Payout Ratio

59.30%

Pledged Shares

Institutional Holding

85.66%

ROCE (avg)

37.01%

ROE (avg)

89.50%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

43.67

EV to EBIT

35.35

EV to EBITDA

32.31

EV to Capital Employed

13.07

EV to Sales

9.29

PEG Ratio

Dividend Yield

133.54%

ROCE (Latest)

36.97%

ROE (Latest)

95.07%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bearish

Bullish

RSI

No Signal

Bollinger Bands

Sideways

Mildly Bullish

Moving Averages

Mildly Bullish (Daily)

KST

Bullish

Dow Theory

No Trend

Bullish

OBV

No Trend

Mildly Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

5What is working for the Company

DIVIDEND PER SHARE(HY)

Highest at USD 4.94

RAW MATERIAL COST(Y)

Fallen by -1.98% (YoY

INVENTORY TURNOVER RATIO(HY)

Highest at 5.35 times

NET SALES(Q)

Highest at USD 4,093 MM

-6What is not working for the Company

OPERATING CASH FLOW(Y)

Lowest at USD 3,126 MM

ROCE(HY)

Lowest at 93.75%

DEBT-EQUITY RATIO (HY)

Highest at 259.22 %

Here's what is working for Illinois Tool Works Inc.

Dividend per share

Highest at USD 4.94 and Grown

In each year in the last five years

MOJO Watch

Company is distributing higher dividend from profits generated

DPS (USD)

Net Sales

Highest at USD 4,093 MM

in the last five periods

MOJO Watch

Near term sales trend is positive

Net Sales (USD MM)

Inventory Turnover Ratio

Highest at 5.35 times

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its inventory faster

Inventory Turnover Ratio

Raw Material Cost

Fallen by -1.98% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Depreciation

Highest at USD 103 MM

in the last five periods

MOJO Watch

The expenditure on assets done by the company may have gone into operation

Depreciation (USD MM)

Here's what is not working for Illinois Tool Works Inc.

Operating Cash Flow

Lowest at USD 3,126 MM and Fallen

In each year in the last three years

MOJO Watch

The company's cash revenues from business operations are falling

Operating Cash Flows (USD MM)

Debt-Equity Ratio

Highest at 259.22 %

in the last five Semi-Annual periods

MOJO Watch

The company is borrowing more to fund its operations; it's liquidity situation may be stressed

Debt-Equity Ratio