Illinois Tool Works (ITW)
Industrials · NYSE · US
Fundamentals
Valuation and ratings
Illinois Tool Works trades at $282.97, close to the $282.44 our discounted cash flow model puts on the business. On this measure the market and the model broadly agree, so the interesting question is which of them is wrong.
Our moat model scores it 66 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 24.9 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Illinois Tool Works
Illinois Tool Works Inc. provides industrial products and equipment in North America, Europe, the Middle East, Africa, the Asia Pacific, and South America. It operates through seven segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products. The Automotive OEM segment offers plastic and metal components, fasteners, and assemblies for automobiles, light trucks, and other industrial uses. The Food Equipment segment provides warewashing, cooking, refrigeration, and food processing equipment; kitchen exhaust, ventilation, and pollution control systems; and food equipment maintenance and repair services. The Test & Measurement and Electronics segment produce and sells test and measurement; and electronic manufacturing and maintenance, repair, and operations solutions. The Welding segment produces arc welding equipment, and metal arc welding consumables and related accessories. The Polymers & Fluids segment produces adhesives, sealants, lubrication and cutting fluids, and fluids and polymers for auto aftermarket maintenance and appearance. The Construction Products segment offers engineered fastening systems and solutions for the residential construction, renovation/remodel, and commercial construction markets. The Specialty Products segment provides beverage packaging equipment and consumables, product coding and marking equipment and consumables, and appliance components and fasteners. The company serves automotive OEM and aftermarket, commercial food equipment, construction, general industrial, industrial capital goods, consumer durables, and other markets, as well as MRO markets. It distributes its products directly to industrial manufacturers, as well as through independent distributors. Illinois Tool Works Inc. was founded in 1912 and is based in Glenview, Illinois.
ITW passes 1 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
5 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Capital Research Global, Capital Research Global Investors$1.24B · 0.2% of book
- Ken Fisher, Fisher Asset Management, LLC$981.68M · 0.3% of book
- Two Sigma, TWO SIGMA INVESTMENTS, LP$382.13M · 0.3% of book
- Arrowstreet Capital, ARROWSTREET CAPITAL, LIMITED PARTNERSHIP$349.76M · 0.2% of book
- D. E. Shaw, D. E. Shaw & Co., Inc.$262.97M · 0.2% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Illinois Tool Works (ITW) undervalued?
Against our discounted cash flow estimate of $282.44, ITW at $282.97 is 0% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own ITW?
5 of the institutions we track reported a position in ITW in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is ITW's P/E ratio?
ITW trades at 24.9 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for ITW, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.