Upside case
Bull case
$365+40.1%
ITW would need investors to value it at roughly 32x earnings — about 9x more generous than today's 23x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewHoldUpdated May 1, 2026
Illinois Tool Works Inc. (ITW) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Hold
Covering
28
analysts
6 bullish · 9 bearish · 28 covering ITW
Strong Buy
0
Buy
6
Hold
13
Sell
9
Strong Sell
0
Consensus Target
$274
+5.0% vs today
Scenario Range
$212 – $365
Model bear to bull value window
Coverage
28
Published analyst ratings
Valuation Context
23.1x
Forward P/E · Market cap $75.1B
ITW price targets
Three scenarios for where ITW stock could go
Current
~$261
Confidence
68 / 100
Updated
May 1, 2026
Where we are now
Current · $261
Bear
$212
Base
$296
Bull
$365
Market caseClosest to today
Base case
$296+13.5%
At 26x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
$212-18.6%
If investor confidence fades or macro conditions deteriorate, a 4x multiple contraction could push ITW down roughly 19% from where it trades now.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Illinois Tool Works Inc.
ITW · NYSEIndustrialsIndustrial - MachineryDecember year-end
Illinois Tool Works is a diversified industrial manufacturer that produces specialized equipment and components across multiple industrial sectors. It generates revenue through seven main segments—Automotive OEM (~25%), Food Equipment (~15%), Test & Measurement (~15%), Welding (~15%), Polymers & Fluids (~15%), Construction Products (~10%), and Specialty Products (~5%)—selling everything from automotive fasteners to commercial kitchen equipment. Its competitive advantage lies in deep engineering expertise across niche industrial applications and a decentralized operating model that allows individual business units to maintain leadership in their specialized markets.
Market Cap
$75.1B
Revenue TTM
$16.2B
Net Income TTM
$3.1B
Net Margin
19.3%
ITW Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
100%Exceptional
12 quarters tracked
Revenue Beat Rate
25%Exceptional
vs consensus estimates
Avg EPS Surprise
+2.5%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 4 of 4Q3 2025
EPS
$2.58/$2.56
Revenue
$4.1B/$4.0B
Q4 2025
EPS
$2.81/$2.75
Revenue
$4.1B/$4.1B
Q1 2026
EPS
$2.72/$2.69
Revenue
$4.1B/$4.1B
Q2 2026
EPS
$2.66/$2.57
Revenue
$4.0B/$4.0B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2025 | $2.58/$2.56 | +0.8% | $4.1B/$4.0B | +0.7% |
| Q4 2025 | $2.81/$2.75 | +2.2% | $4.1B/$4.1B | -0.5% |
| Q1 2026 | $2.72/$2.69 | +1.1% | $4.1B/$4.1B | +0.7% |
| Q2 2026 | $2.66/$2.57 | +3.5% | $4.0B/$4.0B | +0.2% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$16.5B
+1.8% YoY
FY2
$16.9B
+2.1% YoY
EPS Outlook
FY1
$11.30
+4.3% YoY
FY2
$11.91
+5.3% YoY
Trailing FCF (TTM)$2.2B
FCF Margin: 13.6%
Next Earnings
—
Expected EPS
—
Expected Revenue
—
ITW beat EPS estimates in 4 of 4 tracked quarters. A perfect track record raises the bar for the upcoming report.
ITW Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $16.1B
Product Mix
Latest annual revenue by segment or product family
Automotive OEM Segment
20.5%
+3.1% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
North America
34.6%
-0.6% YoY
Tap, hover, or focus a slice to inspect segment detail.
Automotive OEM Segment is the largest disclosed segment at 20.5% of FY 2025 revenue, up 3.1% YoY.
North America is the largest reported region at 34.6%, down 0.6% YoY.
ITW Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Slightly Undervalued
Fair value est. $291 — implies +14.0% from today's price.
Upside to Fair Value
14.0%
potential upside
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
ITW
24.8x
vs
S&P 500
25.2x
In line with benchmark
vs Industrials Trailing P/E
ITW
24.8x
vs
Industrials
25.9x
In line with benchmark
vs ITW 5Y Avg P/E
Today
24.8x
vs
5Y Average
24.7x
In line with benchmark
Forward PE
23.1x
S&P 500
19.1x
+21%
Industrials
20.8x
+11%
5Y Avg
—
—
Trailing PE
24.8x
S&P 500
25.2x
-2%
Industrials
25.9x
-4%
5Y Avg
24.7x
+0%
PEG Ratio
2.58x
S&P 500
1.75x
+48%
Industrials
1.59x
+63%
5Y Avg
—
—
EV/EBITDA
18.1x
S&P 500
15.3x
+18%
Industrials
13.9x
+30%
5Y Avg
18.9x
-4%
Price/FCF
27.7x
S&P 500
21.3x
+30%
Industrials
20.6x
+34%
5Y Avg
29.8x
-7%
Price/Sales
4.7x
S&P 500
3.1x
+49%
Industrials
1.6x
+194%
5Y Avg
4.8x
-2%
Dividend Yield
2.34%
S&P 500
1.88%
+25%
Industrials
1.24%
+89%
5Y Avg
2.18%
+8%
| Metric | ITW | S&P 500 | Industrials | 5Y Avg ITW |
|---|---|---|---|---|
| Forward PE | 23.1x | 19.1x+21% | 20.8x+11% | — |
| Trailing PE | 24.8x | 25.2x | 25.9x | 24.7x |
| PEG Ratio | 2.58x | 1.75x+48% | 1.59x+63% | — |
| EV/EBITDA | 18.1x | 15.3x+18% | 13.9x+30% | 18.9x |
| Price/FCF | 27.7x | 21.3x+30% | 20.6x+34% | 29.8x |
| Price/Sales | 4.7x | 3.1x+49% | 1.6x+194% | 4.8x |
| Dividend Yield | 2.34% | 1.88% | 1.24% | 2.18% |
ITW trades above S&P 500 benchmarks on 5 of 6 measured multiples — commands a broad premium across most valuation dimensions.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolITW Financial Health
Verdict
Strong
ITW generates $2.2B in free cash flow at a 13.6% margin — 29.0% ROIC signals a durable competitive advantage · returns 4.3% of market cap to shareholders annually.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$16.2B
Revenue Growth
TTM vs prior year
+2.9%
Gross Margin
Gross profit as a share of revenue
44.1%
Operating Margin
Operating income divided by revenue
26.4%
Net Margin
Net income divided by revenue
19.3%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$10.84
Free Cash Flow (TTM)
Cash generation after capex
$2.2B
FCF Margin
FCF as share of revenue — the primary cash quality signal
13.6%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
29.0%
ROA
Return on assets, trailing twelve months
19.4%
Cash & Equivalents
Liquid assets on the balance sheet
$851M
Net Debt
Total debt minus cash
$8.1B
Debt Serviceability
Net debt as a multiple of annual free cash flow
3.7× FCF
~3.7 years to full repayment at current FCF run-rate
ROE *
Return on equity, trailing twelve months
97.4%
* Elevated by buyback-compressed equity — compare ROIC (29.0%) for an undistorted picture of capital efficiency.
Shareholder Returns
How capital is returned to owners
Total shareholder yield
4.3%
Dividend
2.3%
Buyback
2.0%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$1.5B
Dividend / Share
Annualized trailing dividend per share
$6.11
Payout Ratio
Share of earnings distributed as dividends
58.2%
Shares Outstanding
Declining as buybacks retire shares
288M
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt). ROE marked * where buyback-compressed equity base may inflate the figure.
Open full ratios pageITW Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 11, 2026
High Risk
Global Economic Volatility
Slower global growth, market instability, and geopolitical tensions can cut demand for ITW’s products, especially in Europe and Asia Pacific. A downturn in these regions could materially reduce revenue streams.
High Risk
Supply Chain Vulnerabilities
ITW’s complex global supply chains face transportation delays and rising raw material costs. Disruptions could increase operating expenses and delay product deliveries, impacting profitability.
Medium
Currency Exchange Fluctuations
With 46% of revenue derived internationally, adverse currency movements can erode reported earnings. Although hedging is employed, significant FX swings still pose a risk to financial results.
Medium
Raw Material Inflation
Inflation in steel, plastics, and other industrial inputs directly raises production costs. Even with pricing power, the price‑cost dynamic can modestly dilute operating margins.
Medium
Interest Rate Sensitivity
Higher interest rates may dampen demand in key end markets such as Construction Products and Automotive OEMs, potentially reducing sales volumes.
Medium
Regulatory & Compliance Risks
Changes in environmental, consumer protection, trade, or labor laws could increase operating costs and affect ITW’s competitive position.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why ITW Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 11, 2026
Robust Revenue & EPS Growth
ITW reported 2025 revenue of $16.04 B, up 0.92% from 2024, beating consensus of $15.73 B. Full‑year GAAP EPS hit $10.49, with 2026 guidance of $11.00‑$11.40, implying 8.18% earnings growth to $11.24 per share.
Operating Margin Expansion Target
ITW’s operating margins have hovered 23‑25% and are targeting 28%. In Q4 2025 the company posted a record 26.5% margin, and 2026 guidance projects 26.5‑27.5%.
Decentralized Structure Drives Efficiency
The company’s decentralized model combined with an 80/20 front‑to‑back process focuses on high‑value customers and products, enhancing operational flexibility and cost control.
Patent‑Rich Innovation Pipeline
Customer‑back innovation has yielded over 20,900 granted and pending patents as of 2024, underpinning the company’s ability to launch new products and capture above‑market growth.
Commitment to Shareholder Returns
ITW has increased dividends for 40+ years, recently announcing a $1.61 quarterly dividend (2.5% yield) and 63rd straight hike, while planning $1.5 B share buybacks in 2026.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
ITW Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$260.52
52W Range Position
36%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$236.68
+10.1% from the low
52-Week High
$303.16
-14.1% from the high
1 Month
+0.79%
3 Month
-11.26%
YTD
+4.4%
1 Year
+8.6%
3Y CAGR
+4.4%
5Y CAGR
+1.9%
10Y CAGR
+9.6%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
ITW vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
23.1x
vs 29.1x median
-21% below peer median
Revenue Growth
+1.8%
vs +3.8% median
-52% below peer median
Net Margin
19.3%
vs 13.3% median
+45% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
ITW ITW Illinois Tool Works Inc. | $75.1B | 23.1x | +1.8% | 19.3% | Hold | +5.0% |
EMR EMR Emerson Electric Co. | $83.2B | 22.8x | +3.8% | 13.3% | Buy | +9.5% |
ETN ETN Eaton Corporation plc | $163.5B | 31.7x | +9.1% | 14.0% | Buy | -9.9% |
HON HON Honeywell International Inc. | $137.4B | 20.6x | +6.1% | 11.2% | Buy | +12.5% |
ROK ROK Rockwell Automation, Inc. | $51.6B | 37.8x | +1.5% | 12.4% | Hold | -5.0% |
PH PH Parker-Hannifin Corporation | $113.9B | 29.1x | +2.5% | 16.6% | Buy | +15.4% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
ITW Dividend and Capital Return
ITW returns 4.3% total yield, led by a 2.34% dividend, raised 30 consecutive years. Buybacks add another 2.0%.
Dividend SustainableFCF Stretched
Total Shareholder Yield
4.3%
Dividend + buyback return per year
Buyback Yield
2.0%
Dividend Yield
2.34%
Payout Ratio
58.2%
How ITW Splits Its Return
Div 2.34%
Buyback 2.0%
Dividend 2.34%Buybacks 2.0%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$6.11
Growth Streak
Consecutive years of dividend increases
30Y
3Y Div CAGR
7.1%
5Y Div CAGR
7.1%
Ex-Dividend Date
—
Payment Cadence
Quarterly
4 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$1.5B
Estimated Shares Retired
6M
Approx. Share Reduction
2.0%
Shares Outstanding
Current diluted share count from the screening snapshot
288M
At 2.0%/year, buybacks mechanically lift EPS even with flat earnings — each remaining share represents a slightly larger piece of the company.
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 2026 | $1.61 | — | — | — |
| 2025 | $6.22 | +7.2% | 2.1% | 4.6% |
| 2024 | $5.80 | +7.0% | 2.0% | 4.2% |
| 2023 | $5.42 | +7.1% | 1.9% | 3.9% |
| 2022 | $5.06 | +7.2% | 2.6% | 4.8% |
FAQ
7 questionsITW Investor Questions
Common questions answered from live analyst data and company financials.
01Is Illinois Tool Works Inc. (ITW) stock a buy or sell in 2026?
Illinois Tool Works Inc. (ITW) is rated Hold by Wall Street analysts as of 2026. Of 28 analysts covering the stock, 6 rate it Buy or Strong Buy, 13 rate it Hold, and 9 rate it Sell or Strong Sell. The consensus 12-month price target is $274, implying +5.0% from the current price of $261. The bear case scenario is $212 and the bull case is $365.
02What is the ITW stock price target for 2026?
The Wall Street consensus price target for ITW is $274 based on 28 analyst estimates. The high-end target is $285 (+9.4% from today), and the low-end target is $254 (-2.5%). The base case model target is $296.
03Is Illinois Tool Works Inc. (ITW) stock overvalued in 2026?
ITW trades at 23.1x times forward earnings. The stock's valuation is broadly in line with the broader market. Based on current multiples versus the peer group, the relative model signals slightly undervalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Illinois Tool Works Inc. (ITW) stock in 2026?
The primary risks for ITW in 2026 are: (1) Global Economic Volatility — Slower global growth, market instability, and geopolitical tensions can cut demand for ITW’s products, especially in Europe and Asia Pacific. (2) Supply Chain Vulnerabilities — ITW’s complex global supply chains face transportation delays and rising raw material costs. (3) Currency Exchange Fluctuations — With 46% of revenue derived internationally, adverse currency movements can erode reported earnings. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Illinois Tool Works Inc.'s revenue and earnings forecast?
Analyst consensus estimates ITW will report consensus revenue of $16.5B (+1.8% year-over-year) and EPS of $11.30 (+4.3% year-over-year) for the upcoming fiscal year. The following year, analysts project $16.9B in revenue.
06When does Illinois Tool Works Inc. (ITW) report its next earnings?
A confirmed upcoming earnings date for ITW is not yet available. Check the Earnings section above for the most recent quarterly report dates and forward estimates.
07How much free cash flow does Illinois Tool Works Inc. generate?
Illinois Tool Works Inc. (ITW) generated $2.2B in free cash flow over the trailing twelve months — a free cash flow margin of 13.6%. ITW returns capital to shareholders through dividends (2.3% yield) and share repurchases ($1.5B TTM).