MODEL VERDICT
Illinois Tool Works Inc. (ITW)
Relative Valuation•Peer multiples, Monte Carlo simulation & quality-adjusted fair value
Popular:
Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| May 1, 2026 | NEUTRAL | 0.50 | $255.47 | CURRENT | — |
| Apr 24, 2026 | NEUTRAL | 0.40 | $269.29 | CURRENT | — |
| Apr 17, 2026 | NEUTRAL | 0.40 | $272.26 | CURRENT | — |
| Apr 16, 2026 | NEUTRAL | 0.42 | $264.39 | CURRENT | — |
| Apr 10, 2026 | NEUTRAL | 0.28 | $270.52 | CURRENT | — |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Forward P/E 14 analyst estimates | $267.56 | +4.7% | 20% | A- | Analyst Est. |
| EV/EBITDA 14 industry peers | $276.35 | +8.2% | 20% | A- | Peer Data |
| Industry Median P/E 14 industry peers | $346.49 | +35.6% | 15% | A | Peer Data |
| Price / Free Cash Flow 14 industry peers | $260.20 | +1.9% | 15% | B+ | Peer Data |
| EV/EBIT 14 industry peers | $322.55 | +26.3% | 8% | B+ | Peer Data |
| EV/FCF 14 industry peers | $252.46 | -1.2% | 7% | B | Model Driven |
| Peg Ratio 9 industry peers | $265.31 | +3.9% | 5% | B | Data |
| EV To Revenue 14 industry peers | $251.74 | -1.5% | 4% | B | Data |
| Price / Sales 14 industry peers | $250.73 | -1.9% | 3% | B | Model Driven |
| Earnings Yield 14 industry peers | $346.41 | +35.6% | 2% | B | Data |
| FCF Yield 14 industry peers | $259.96 | +1.8% | 1% | B | Data |
| Weighted Output Blended model output | $291.20 | +14.0% | 100% | 100 | SLIGHTLY UNDERVALUED |
| EPS Growth ↓ | P/E Multiple → | 20× | 22× | 24× (Current) | 26× | 28× |
|---|---|---|---|---|---|
| Bear Case (4%) | $218 | $240 | $261 | $283 | $305 |
| Conservative (6%) | $223 | $245 | $267 | $290 | $312 |
| Base Case (9.6%) | $230 | $253 | $276 | $299 | $322 |
| Bull Case (13%) | $237 | $261 | $284 | $308 | $332 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 25.36 | 23.48 | 21.65 | 30.75 | 3.52 |
| EV/EBIT | 20.41 | 18.81 | 17.56 | 24.28 | 2.76 |
| EV/EBITDA | 18.94 | 18.02 | 16.83 | 21.72 | 1.96 |
| P/FCF | 28.00 | 26.55 | 21.91 | 35.35 | 5.01 |
| P/FFO | 22.06 | 20.82 | 19.41 | 25.59 | 2.68 |
| P/AFFO | 24.85 | 23.69 | 21.87 | 28.22 | 2.85 |
| P/B Ratio | 22.12 | 22.16 | 19.30 | 26.39 | 2.24 |
| Div Yield | 0.02 | 0.02 | 0.02 | 0.02 | 0.00 |
| P/S Ratio | 4.74 | 4.75 | 4.15 | 5.40 | 0.46 |
Based on our peer multiples analysis with 28 valuation metrics, the model estimates ITW's fair value at $291.20 vs the current price of $255.47, implying +14.0% upside potential. Model verdict: Slightly Undervalued. Confidence: 100/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $291.20 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $260.14 (P10) to $293.97 (P90), with a median of $276.78.
ITW's current P/E of 24.4x compares to the industry median of 33.0x (14 peers in the group). This represents a -26.3% discount to the industry. The historical average P/E is 25.4x over 7 years. Signal: Discount.
28 analysts cover ITW with a consensus rating of Hold. The consensus price target is $273.67 (range: $254.00 — $285.00), implying +7.1% upside from the current price. Grade breakdown: Strong Buy (0), Buy (6), Hold (13), Sell (9), Strong Sell (0).
The model confidence score is 100/100, based on: data completeness (30), peer quality (25), historical depth (20), earnings stability (15), and model agreement (10). Cyclicality penalty: -0 points. The model shows strong agreement across inputs.
The model flags several key risks: (1) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that ITW's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of +0.4σ, meaning margins are 0.4 standard deviations above their historical average. If margins revert to the 7-year mean (25.6%), the model estimates fair value drops by 3810.0% to approximately $353. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.