ITW
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ITW Stock AI Analysis

ESEN AI analysis of ITW stock updated every 12 hours.

ESEN Institutional Analysis

ITW Systematic Research

Illinois Tool Works presents a distinctive fundamental profile among diversified industrial manufacturers, with systematic screening revealing an exceptional return on equity of 101.75%—a figure that significantly exceeds typical industrial sector benchmarks. Trading at $286.95 with an $82.6 billion market capitalization, the company operates within approximately 6% of its 52-week high of $303.16, reflecting sustained institutional interest in this machinery sector leader.

The quantitative model highlights several compelling operational metrics. The company's net margin of 19.39% paired with an operating margin of 26.5% demonstrates substantial pricing power and cost discipline within its diversified equipment portfolio. Return on assets reaches 19.64% while return on investment stands at 25.91%, both flagging efficient capital deployment across ITW's decentralized business units. Revenue growth of 4.3% year-over-year indicates steady organic expansion despite challenging industrial end markets.

Key strengths identified through fundamental screening include:

  • Exceptional ROE exceeding 100%, amplified by strategic capital structure optimization
  • Robust gross margin of 44.16%, reflecting differentiated product positioning and enterprise segment mix
  • Current ratio of 1.21 providing adequate near-term liquidity for operational flexibility

Risk factors warrant attention: the debt-to-equity ratio of 2.78 represents elevated leverage relative to industrial peers, while EPS contraction of -3.19% year-over-year raises questions about earnings momentum. The price-to-book multiple of 22.16 substantially exceeds the book value per share of $11.17, indicating significant goodwill or intangible asset concentration.

Relative to diversified industrial peers Parker-Hannifin (PH), Ingersoll Rand (IR), and Dover Corporation (DOV), ITW's valuation multiples—P/E of 25.82 and P/S of 5.01—position the stock at a premium, justified primarily by superior return metrics.

Analysis updated monthly based on systematic screening of fundamentals, profitability, growth, and peer positioning.

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