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Glenview, Illinois-based Illinois Tool Works Inc. (ITW) manufactures and sells industrial products and equipment. Valued at $74.4 billion by market cap, the company provides industrial fluids and adhesives, tooling for specialty applications, welding products, and quality measurement equipment and systems.
Shares of this global multi-industry manufacturing leader have underperformed the broader market considerably over the past year. ITW has gained 2.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 26.1%. In 2024, ITW stock is down 5.1%, while SPX is up 17.2% on a YTD basis.
Narrowing the focus, ITW has also lagged behind the iShares U.S. Industrials ETF (IYJ). The exchange-traded fund has gained about 20.1% over the past year. Moreover, the ETF’s 11.7% gains on a YTD basis outshine the stock’s single-digit losses over the same time frame.
ITW’s overall performance can be attributed to decelerating growth and macroeconomic difficulties, as well as an unfavorable foreign currency translation.
On Jul. 30, ITW shares closed up marginally after reporting its Q2 earnings results. Its revenue stood at $4 billion, down 1.2% year over year. Its EPS increased 2.4% year over year to $2.54. ITW lowered the top-end of its full-year EPS guidance and expects it to be between $10.30 and $10.40, but the company’s total revenues and organic revenues are expected to be flat.
For the current fiscal year, ending in December, analysts expect ITW’s EPS to grow 4.1% to $10.18 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters. Moreover, the company surpassed its consensus EPS estimate by 3.7% in the previous quarter.
Among the 17 analysts covering ITW stock, the consensus is a “Hold.” That’s based on three “Strong Buy” ratings, nine “Holds,” one “Moderate Sell,” and four “Strong Sells.”
This configuration is more bullish than a month ago when two analysts suggested a “Strong Buy.”
On Aug. 25, Wells Fargo & Company (WFC) analyst Joe O’Dea maintained a “Sell” rating on ITW with a price target of $236.
While ITW currently trades above its mean price target of $244.50, the Street-high price target of $281 suggests an upside potential of 13.1%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
