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.

Applied Materials, Inc.

Parker-Hannifin Corp.

Xylem, Inc.

Trane Technologies Plc

Dover Corp.

GE Aerospace

Johnson Controls International Plc

Illinois Tool Works Inc.

Carrier Global Corp.

Ingersoll Rand, Inc.

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.

7.14%

0.33

22.83%

S&P 500

22.24%

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

86.39%

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

42.11

EV to EBIT

34.15

EV to EBITDA

31.22

EV to Capital Employed

12.63

EV to Sales

8.97

PEG Ratio

Dividend Yield

138.49%

ROCE (Latest)

36.97%

ROE (Latest)

95.07%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bearish

Bullish

RSI

No Signal

Bollinger Bands

Bearish

Bullish

Moving Averages

Mildly Bullish (Daily)

KST

Mildly Bearish

Bullish

Dow Theory

No Trend

OBV

Mildly Bullish

No Trend

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

4What is working for the Company

DIVIDEND PER SHARE(HY)

Highest at USD 4.97

RAW MATERIAL COST(Y)

Fallen by -0.52% (YoY

INVENTORY TURNOVER RATIO(HY)

Highest at 5.39 times

-7What is not working for the Company

OPERATING CASH FLOW(Y)

Lowest at USD 3,157 MM

INTEREST COVERAGE RATIO(Q)

Lowest at 1,532.88

CASH AND EQV(HY)

Lowest at USD 1,678 MM

DEBT-EQUITY RATIO (HY)

Highest at 257.7 %

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

Dividend per share

Highest at USD 4.97 and Grown

In each year in the last five years

MOJO Watch

Company is distributing higher dividend from profits generated

DPS (USD)

Inventory Turnover Ratio

Highest at 5.39 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 -0.52% (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

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

Operating Cash Flow

Lowest at USD 3,157 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)

Interest Coverage Ratio

Lowest at 1,532.88

in the last five periods

MOJO Watch

The company's ability to manage interest payments is deteriorating

Operating Profit to Interest

Cash and Eqv

Lowest at USD 1,678 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is deteriorating

Cash and Cash Equivalents

Debt-Equity Ratio

Highest at 257.7 %

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

Non Operating Income

Highest at USD 0.02 MM

in the last five periods

MOJO Watch

Increased income from non business activities may not be sustainable

Non Operating income