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Based in Glenview, Illinois, Illinois Tool Works Inc. (ITW) manufactures industrial products and equipment. Valued at $71.30 billion by market cap, the company is one of the leading manufacturers of specialized industrial equipment, consumables, and related service businesses.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and ITW fits right into that category, signifying its substantial size, stability, and dominance in its industry. The company operates through seven segments: Automotive OEM, Food Equipment, Test & Measurement and Electronics, Welding, Polymers & Fluids, Construction Products, and Specialty Products.
The multi-industry manufacturing leader has fallen 11.9% from its 52-week high of $271.15, which it hit on Mar. 22. Shares of ITW are down 10.5% over the past three months, underperforming the Dow Jones Industrials Average’s ($DOWI) marginal gains over the same time frame.
In the long term, ITW has declined 3.7% over the past year and 8.8% in 2024. By contrast, DOWI is up 2.9% on a YTD basis and 13.1% over the past 52 weeks.
To confirm the bearish price trend, the stock has been trading below its 50-day moving average since early April and its 200-day moving average since late May, indicating a bearish price trend.
ITW’s adjusted EPS beat Wall Street estimates, but its revenue fell short of expectations in Q1. The company’s revenue was $3.97 billion, falling short of the Street estimates of $4.02 billion. Its adjusted EPS came in at $2.44, surpassing the consensus estimates of $2.35. ITW raised its full-year EPS to be between $10.30 and $10.70. It also expects revenue growth of 2% to 4% and organic growth of 1% to 3% based on current demand levels and foreign exchange rates. Since reporting its Q1 results on Apr. 30, the stock has been on a downtrend.
Rival 3M Company (MMM) outperformed ITW with 15.4% gains in the past 52 weeks and a 10.4% increase on a YTD basis.
After its recent underperformance compared to DOWI, analysts are cautious about ITW’s prospects. The stock has a consensus rating of “Hold” from the 14 analysts covering it, but the mean price target of $250.33 is a 4.8% premium to current levels.
On the date of publication, Dipanjan Banchur 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.
