ILLINOIS TOOL WORKS (ITW) Stock Fundamental Analysis
USA • New York Stock Exchange • NYSE:ITW • US4523081093
293.57 USD
+5.28 (+1.83%)
At close: Feb 6, 2026
293.57 USD
0 (0%)
After Hours: 2/6/2026, 8:04:00 PM
Overall ITW gets a fundamental rating of 6 out of 10. We evaluated ITW against 132 industry peers in the Machinery industry. While ITW has a great profitability rating, there are some minor concerns on its financial health. ITW is quite expensive at the moment. It does show a decent growth rate. ITW also has an excellent dividend rating. These ratings would make ITW suitable for dividend investing!
1. Profitability
1.1 Basic Checks
- ITW had positive earnings in the past year.
- In the past year ITW had a positive cash flow from operations.
- Each year in the past 5 years ITW has been profitable.
- Of the past 5 years ITW 4 years had a positive operating cash flow.
1.2 Ratios
- ITW has a Return On Assets of 18.75%. This is amongst the best in the industry. ITW outperforms 96.97% of its industry peers.
- The Return On Equity of ITW (94.33%) is better than 100.00% of its industry peers.
- The Return On Invested Capital of ITW (24.43%) is better than 97.73% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for ITW is significantly above the industry average of 10.37%.
- The last Return On Invested Capital (24.43%) for ITW is well below the 3 year average (28.88%), which needs to be investigated, but indicates that ITW had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.75% | ||
| ROE | 94.33% | ||
| ROIC | 24.43% |
ROA(3y)20.4%
ROA(5y)19.52%
ROE(3y)99.48%
ROE(5y)94.2%
ROIC(3y)28.88%
ROIC(5y)26.49%
1.3 Margins
- Looking at the Profit Margin, with a value of 19.05%, ITW belongs to the top of the industry, outperforming 96.21% of the companies in the same industry.
- ITW's Profit Margin has improved in the last couple of years.
- ITW has a Operating Margin of 26.20%. This is amongst the best in the industry. ITW outperforms 98.48% of its industry peers.
- In the last couple of years the Operating Margin of ITW has grown nicely.
- Looking at the Gross Margin, with a value of 43.93%, ITW belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
- In the last couple of years the Gross Margin of ITW has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.2% | ||
| PM (TTM) | 19.05% | ||
| GM | 43.93% |
OM growth 3Y3.37%
OM growth 5Y2.77%
PM growth 3Y0.12%
PM growth 5Y2.64%
GM growth 3Y2.61%
GM growth 5Y1.3%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ITW is creating value.
- ITW has less shares outstanding than it did 1 year ago.
- The number of shares outstanding for ITW has been reduced compared to 5 years ago.
- The debt/assets ratio for ITW is higher compared to a year ago.
2.2 Solvency
- An Altman-Z score of 8.47 indicates that ITW is not in any danger for bankruptcy at the moment.
- ITW has a better Altman-Z score (8.47) than 90.91% of its industry peers.
- The Debt to FCF ratio of ITW is 3.14, which is a good value as it means it would take ITW, 3.14 years of fcf income to pay off all of its debts.
- ITW's Debt to FCF ratio of 3.14 is fine compared to the rest of the industry. ITW outperforms 66.67% of its industry peers.
- ITW has a Debt/Equity ratio of 2.80. This is a high value indicating a heavy dependency on external financing.
- Looking at the Debt to Equity ratio, with a value of 2.80, ITW is doing worse than 86.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.8 | ||
| Debt/FCF | 3.14 | ||
| Altman-Z | 8.47 |
ROIC/WACC2.61
WACC9.36%
2.3 Liquidity
- ITW has a Current Ratio of 1.53. This is a normal value and indicates that ITW is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Current ratio, with a value of 1.53, ITW is doing worse than 71.97% of the companies in the same industry.
- A Quick Ratio of 1.11 indicates that ITW should not have too much problems paying its short term obligations.
- ITW has a Quick ratio (1.11) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.53 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 3.15% over the past year.
- The Earnings Per Share has been growing by 9.61% on average over the past years. This is quite good.
- Looking at the last year, ITW shows a small growth in Revenue. The Revenue has grown by 0.92% in the last year.
- Measured over the past years, ITW shows a small growth in Revenue. The Revenue has been growing by 4.99% on average per year.
EPS 1Y (TTM)3.15%
EPS 3Y2.36%
EPS 5Y9.61%
EPS Q2Q%7.09%
Revenue 1Y (TTM)0.92%
Revenue growth 3Y0.23%
Revenue growth 5Y4.99%
Sales Q2Q%4.09%
3.2 Future
- ITW is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.25% yearly.
- Based on estimates for the next years, ITW will show a small growth in Revenue. The Revenue will grow by 4.75% on average per year.
EPS Next Y8.41%
EPS Next 2Y7.81%
EPS Next 3Y8.91%
EPS Next 5Y11.25%
Revenue Next Year3.33%
Revenue Next 2Y3.36%
Revenue Next 3Y3.89%
Revenue Next 5Y4.75%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 27.99, ITW can be considered very expensive at the moment.
- ITW's Price/Earnings ratio is in line with the industry average.
- ITW's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.92.
- ITW is valuated quite expensively with a Price/Forward Earnings ratio of 25.81.
- The rest of the industry has a similar Price/Forward Earnings ratio as ITW.
- Compared to an average S&P500 Price/Forward Earnings ratio of 27.78, ITW is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.99 | ||
| Fwd PE | 25.81 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as ITW.
- ITW's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.93 | ||
| EV/EBITDA | 19.82 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ITW does not grow enough to justify the current Price/Earnings ratio.
- ITW has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)3.33
PEG (5Y)2.91
EPS Next 2Y7.81%
EPS Next 3Y8.91%
5. Dividend
5.1 Amount
- ITW has a Yearly Dividend Yield of 2.23%. Purely for dividend investing, there may be better candidates out there.
- ITW's Dividend Yield is rather good when compared to the industry average which is at 1.06. ITW pays more dividend than 88.64% of the companies in the same industry.
- ITW's Dividend Yield is a higher than the S&P500 average which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.23% |
5.2 History
- On average, the dividend of ITW grows each year by 6.98%, which is quite nice.
- ITW has been paying a dividend for at least 10 years, so it has a reliable track record.
- ITW has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.98%
Div Incr Years29
Div Non Decr Years29
5.3 Sustainability
- 58.20% of the earnings are spent on dividend by ITW. This is a bit on the high side, but may be sustainable.
- The dividend of ITW is growing, but earnings are growing more, so the dividend growth is sustainable.
DP58.2%
EPS Next 2Y7.81%
EPS Next 3Y8.91%
293.57
+5.28 (+1.83%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)02-03 2026-02-03/bmo
Earnings (Next)04-28 2026-04-28/bmo
Inst Owners84.97%
Inst Owner Change-1.65%
Ins Owners0.24%
Ins Owner Change-8.5%
Market Cap85.16B
Revenue(TTM)16.04B
Net Income(TTM)3.03B
Analysts52.31
Price Target264.95 (-9.75%)
Short Float %2.66%
Short Ratio6.2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.23% |
Yearly Dividend5.71
Dividend Growth(5Y)6.98%
DP58.2%
Div Incr Years29
Div Non Decr Years29
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.08%
Min EPS beat(2)-0.33%
Max EPS beat(2)2.48%
EPS beat(4)3
Avg EPS beat(4)0.83%
Min EPS beat(4)-0.33%
Max EPS beat(4)2.48%
EPS beat(8)6
Avg EPS beat(8)1.3%
EPS beat(12)10
Avg EPS beat(12)2.72%
EPS beat(16)14
Avg EPS beat(16)2.82%
Revenue beat(2)0
Avg Revenue beat(2)-0.94%
Min Revenue beat(2)-1.6%
Max Revenue beat(2)-0.27%
Revenue beat(4)0
Avg Revenue beat(4)-1.32%
Min Revenue beat(4)-2.36%
Max Revenue beat(4)-0.27%
Revenue beat(8)0
Avg Revenue beat(8)-1.71%
Revenue beat(12)1
Avg Revenue beat(12)-1.46%
Revenue beat(16)5
Avg Revenue beat(16)-0.55%
PT rev (1m)0.42%
PT rev (3m)0.39%
EPS NQ rev (1m)-0.08%
EPS NQ rev (3m)-0.22%
EPS NY rev (1m)0.02%
EPS NY rev (3m)0.42%
Revenue NQ rev (1m)-0.05%
Revenue NQ rev (3m)-0.05%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)-0.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.99 | ||
| Fwd PE | 25.81 | ||
| P/S | 5.36 | ||
| P/FCF | 29.93 | ||
| P/OCF | 25.99 | ||
| P/B | 26.55 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.82 |
EPS(TTM)10.49
EY3.57%
EPS(NY)11.37
Fwd EY3.87%
FCF(TTM)9.81
FCFY3.34%
OCF(TTM)11.3
OCFY3.85%
SpS54.75
BVpS11.06
TBVpS-8.14
PEG (NY)3.33
PEG (5Y)2.91
Graham Number51.09
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.75% | ||
| ROE | 94.33% | ||
| ROCE | 34.67% | ||
| ROIC | 24.43% | ||
| ROICexc | 26.26% | ||
| ROICexgc | 47.72% | ||
| OM | 26.2% | ||
| PM (TTM) | 19.05% | ||
| GM | 43.93% | ||
| FCFM | 17.91% |
ROA(3y)20.4%
ROA(5y)19.52%
ROE(3y)99.48%
ROE(5y)94.2%
ROIC(3y)28.88%
ROIC(5y)26.49%
ROICexc(3y)31.54%
ROICexc(5y)28.97%
ROICexgc(3y)68.5%
ROICexgc(5y)61.67%
ROCE(3y)38.38%
ROCE(5y)35.46%
ROICexgc growth 3Y12.09%
ROICexgc growth 5Y10.24%
ROICexc growth 3Y7.34%
ROICexc growth 5Y8.51%
OM growth 3Y3.37%
OM growth 5Y2.77%
PM growth 3Y0.12%
PM growth 5Y2.64%
GM growth 3Y2.61%
GM growth 5Y1.3%
F-Score6
Asset Turnover0.98
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.8 | ||
| Debt/FCF | 3.14 | ||
| Debt/EBITDA | 1.97 | ||
| Cap/Depr | 109.09% | ||
| Cap/Sales | 2.72% | ||
| Interest Coverage | 15.13 | ||
| Cash Conversion | 71.9% | ||
| Profit Quality | 94.02% | ||
| Current Ratio | 1.53 | ||
| Quick Ratio | 1.11 | ||
| Altman-Z | 8.47 |
F-Score6
WACC9.36%
ROIC/WACC2.61
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)3.15%
EPS 3Y2.36%
EPS 5Y9.61%
EPS Q2Q%7.09%
EPS Next Y8.41%
EPS Next 2Y7.81%
EPS Next 3Y8.91%
EPS Next 5Y11.25%
Revenue 1Y (TTM)0.92%
Revenue growth 3Y0.23%
Revenue growth 5Y4.99%
Sales Q2Q%4.09%
Revenue Next Year3.33%
Revenue Next 2Y3.36%
Revenue Next 3Y3.89%
Revenue Next 5Y4.75%
EBIT growth 1Y-1.4%
EBIT growth 3Y3.61%
EBIT growth 5Y7.9%
EBIT Next Year15.58%
EBIT Next 3Y8.5%
EBIT Next 5Y8.45%
FCF growth 1Y3.23%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y2.21%
OCF growth 3YN/A
OCF growth 5YN/A
ILLINOIS TOOL WORKS / ITW FAQ
What is the ChartMill fundamental rating of ILLINOIS TOOL WORKS (ITW) stock?
ChartMill assigns a fundamental rating of 6 / 10 to ITW.
Can you provide the valuation status for ILLINOIS TOOL WORKS?
ChartMill assigns a valuation rating of 3 / 10 to ILLINOIS TOOL WORKS (ITW). This can be considered as Overvalued.
How profitable is ILLINOIS TOOL WORKS (ITW) stock?
ILLINOIS TOOL WORKS (ITW) has a profitability rating of 9 / 10.
What is the valuation of ILLINOIS TOOL WORKS based on its PE and PB ratios?
The Price/Earnings (PE) ratio for ILLINOIS TOOL WORKS (ITW) is 27.99 and the Price/Book (PB) ratio is 26.55.
Is the dividend of ILLINOIS TOOL WORKS sustainable?
The dividend rating of ILLINOIS TOOL WORKS (ITW) is 8 / 10 and the dividend payout ratio is 58.2%.