Illinois Tool Works Inc

Industrials
Industrial Machinery/Components
www.itw.com

Earnings Score
Safety Score

Market Cap $80.77B
PE 23
Debt $9.85B
Cash $947.00M
EV $89.68B
FCF $2.76B

Earnings

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Sales & Net Margins

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Earnings	$3.46B
EBIT	$4.27B
ROE	102%
ROA	27%
FCF	$2.76B
Equity	$3.39B
Growth Stability	74%
PE	23.38
PEG	2.66
PB	23.81
P/FCF	29.31
P/S	5.06
Price/Cash	0.01
Debt/Equity	2.9
Debt/FCF	3.57
Net Margins	23%
Gross Margins	44%
Op. Margins	27%
Earnings CAGR	7%
Sales Growth YoY	-2%
Sales Growth QoQ	-2%
Sales CAGR	2%
FCF CAGR	3%
Equity CAGR	-6%
Earnings Stability	0.76
Earnings Growth YoY	50%
Earnings Growth QoQ	53%

Earnings CAGR 5Y	9%
Sales CAGR 5Y	6%
FCF CAGR 5Y	1%
Equity CAGR 5Y	3%
Earnings CAGR 3Y	3%
Sales CAGR 3Y	3%
FCF CAGR 3Y	18%
Equity CAGR 3Y	-5%
Market Cap	$80.77B
Revenue	$15.95B
Dividend Yield	2%
Payout Ratio	49%
Assets	$15.82B
Total Debt	$9.85B
Cash	$947.00M
Shares Outstanding	295.3M
EV	89.68B
Earnings Score	87%
Safety Score	78%
Working Capital	1.68B
Current Ratio	1.36
Gross Profit	$7.00B
Shares Growth 3y	-2%
Equity Growth QoQ	15%
Equity Growth YoY	13%

Assets & ROA

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Stockholders Equity & ROE

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Illinois Tool Works is a diversified global manufacturer that produces specialized industrial equipment, consumables, and related services. The firm operates 87 global divisions through seven distinct operating segments: automotive OEM, construction products, food equipment, specialty products, test/measurement and electronics, polymers and fluids, and welding. About half of its revenue comes from its operations in North America, with the remainder originating from international markets. ITW takes a bottom-up and decentralized approach to portfolio management, with the exception that each segment must apply its 80/20 operating process modeled on the Pareto principle.

SEC Filings

Direct access to Illinois Tool Works Inc (ITW) Annual Reports (10K) and Quarterly Reports (10Q) from the SEC website.

2024
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2023
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2022
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31

Sector Comparison

How does Illinois Tool Works Inc compare to its competitors?

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Peter Lynch's Chart

This chart shows the current pricing of Illinois Tool Works Inc compared to its past. The addition of the earnings trend line provides further insights into the company's earnings power.

CAGR 7%

Stability 76%

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Illinois Tool Works Inc Discounted Cash Flow

Fully customizable DCF calculator online for Illinois Tool Works Inc.

Years

Calculation mode

= $33B

	0	1	2	3	4	5	6	7	8	9	10	TV
fcf	$2.8B	$2.8B	$2.9B	$3B	$3.1B	$3.2B	$3.2B	$3.3B	$3.4B	$3.5B	$3.6B	$36B
DCF		$2.6B	$2.4B	$2.2B	$2.1B	$2B	$1.8B	$1.7B	$1.6B	$1.5B	$1.4B	$14B
Value	$33B

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

Years	12/2014	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	TTM
Net Margins	20%	14%	15%	12%	17%	18%	17%	19%	19%	18%	23%
ROA	-	19%	21%	21%	25%	23%	19%	22%	26%	26%	27%
ROE	-	36%	48%	37%	79%	83%	66%	74%	98%	98%	102%

Good Net Margins (22.88%)

Net Margins are high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Safety and Stability

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Years	12/2014	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	TTM
Debt over FCF	-	3.68	4.18	3.96	3.57	2.91	3.3	3.65	4.29	3.09	3.57
Debt over Equity	1.09	1.42	1.99	1.81	2.68	2.56	2.66	2.28	2.69	3.16	2.9
Growth Stability	-	-	-	74%	100%	100%	93%	100%	100%	100%	74%

Neutral Debt/FCF ratio (3.57)

Net Margins are at a level that is not too high nor too low. They are not a competitive advantage but they are not a competitive disadvantage either.

Bad Debt/Equity ratio (2.9)

The company is overleveraged and has a bad balance between equity and debt.

Bad Graham’s Stability (74%)

The company has a bad stability in its earnings, which is a sign of a bad competitive advantage.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Years	12/2014	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	CAGR 5Y
Revenue YoY growth	-	-7%	1%	5%	3%	-4%	-11%	15%	10%	1%	6%
Earnings YoY growth	-	-36%	7%	-17%	52%	-2%	-16%	28%	13%	-3%	9%
Equity YoY growth	-	-23%	-19%	8%	-29%	-7%	5%	14%	-15%	-2%	3%
FCF YoY growth	-	61%	1%	4%	16%	9%	-4%	-12%	-14%	59%	1%