Fact based stock research
Illinois Tool Works (NYSE:ITW)

US4523081093

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Illinois Tool Works stock research in summary

itw.com

ANALYSIS: With an Obermatt Combined Rank of 1 (worse than 99% compared with investment alternatives), Illinois Tool Works (Industrial Machinery, USA) shares have lower financial characteristics compared with similar stocks. Shares of Illinois Tool Works are low in value (priced high) with a consolidated Value Rank of 11 (worse than 89% of alternatives), show below-average growth (Growth Rank of 37), and are riskily financed (Safety Rank of 19), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 1, is a sell recommendation based on Illinois Tool Works's financial characteristics. As the company Illinois Tool Works's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 11), low growth (Obermatt Growth Rank of 37), and risky financing practices (Obermatt Safety Rank of 19), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	11
Growth Rank	37
Safety Rank	19
Combined Rank	1

Country	USA
Industry	Industrial Machinery
Index	Dividends USA, S&P 500
Size class	XX-Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Illinois Tool Works

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	40	22	18	11
GROWTH
GROWTH	35	58	12	37
SAFETY
SAFETY	9	17	11	19
SENTIMENT
SENTIMENT	n/a	56	52	^new
360° VIEW
360° VIEW	n/a	24	1	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Illinois Tool Works is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	40	22	18	11
GROWTH
GROWTH	35	58	12	37
SAFETY
SAFETY	9	17	11	19
COMBINED
COMBINED	8	10	1	1

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Illinois Tool Works the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 11 (worse than 89% compared with alternatives), Illinois Tool Works shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Illinois Tool Works. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 93% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 3 which means that the stock price compared with what market professionals expect for future profits is higher than 97% of comparable companies, indicating a low value concerning Illinois Tool Works's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 15 which means that the stock price compared with what market professionals expect for future profit levels is higher than 85% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 1 is also low. Compared with invested capital, the stock price is higher than for 99% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 11, is a sell recommendation based on Illinois Tool Works's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Illinois Tool Works? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Illinois Tool Works only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	31	11	9	3
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	60	22	18	15
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	1	1	1	1
DIVIDEND YIELD
DIVIDEND YIELD	80	88	92	93
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	40	22	18	11

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Illinois Tool Works; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 37 (better than 37% compared with alternatives), Illinois Tool Works shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four metrics below average for Illinois Tool Works. While Profit Growth has a good rank of 67, as professionals currently expect the company to grow its profits more than 67% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 38, which means that currently professionals expect the company to grow less than 62% of its competitors, while Capital Growth has a rank of 17 and Stock Returns have been below market median, with a rank of 49 (51% of alternative investments were better). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 37, is a hold recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	27	50	21	38
PROFIT GROWTH
PROFIT GROWTH	48	59	26	67
CAPITAL GROWTH
CAPITAL GROWTH	n/a	29	23	17
STOCK RETURNS
STOCK RETURNS	30	62	40	49
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	35	58	12	37

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Illinois Tool Works.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 19 (better than 19% compared with alternatives), the company Illinois Tool Works has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Illinois Tool Works is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Illinois Tool Works. Liquidity is at 82, meaning the company generates more profit to service its debt than 82% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 12, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 88% of its competitors. Leverage is also high at a rank of 10, which means that the company has an above-average debt-to-equity ratio. It has more debt than 90% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 19 (worse than 81% compared with alternatives), Illinois Tool Works has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	32	5	3	10
REFINANCING
REFINANCING	20	10	8	12
LIQUIDITY
LIQUIDITY	47	81	71	82
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	9	17	11	19

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Illinois Tool Works and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	9	5	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	53	55	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	48	75	^new
MARKET PULSE
MARKET PULSE	n/a	91	87	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	56	52	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Illinois Tool Works.
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