Illinois Tool Works Inc.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
ITW is a buy as quarterly revenue growth accelerates meaningfully — Q2 2026 revenue rose 6.1% YoY to $4.30B, up from just 0.6% in Q2 2025 — while EPS has beaten consensus for eight straight quarters including $2.84 vs. $2.79 estimated in the most recent quarter.
Gross margin has expanded every year from 40.4% in FY2021 to 44.1% in FY2025, and the stock trades at a 18.7% P/E discount to the peer median (24.6x vs. 30.3x) despite a Dividend King pedigree with a freshly raised $1.72 quarterly payout. The FY2025 earnings decline (EPS down 10.4% to $10.49) appears to be bottoming, with management guiding 4–5% revenue and 7–11% EPS growth for 2026, and the technical picture is stabilizing with MACD histogram turning positive and the stock holding above its 200-day MA of $268.59.
What could go wrong
- High leverage. Total debt of $8.97B against stockholders' equity of just $3.23B as of FY2025 leaves limited balance-sheet flexibility if end-market conditions deteriorate further.
- Weak end markets. Automotive OEM and foodservice segments remain soft per recent Zacks commentary, which could cap the revenue recovery if those segments don't inflect.
- Insider selling. Insiders are net sellers over the trailing 24 months (-128,703 shares, -$9.47M), including recent option exercises and open-market sales by a senior executive in August 2026.
- Smart money outflow. Fund count declined from 64 in Q1 2026 to 60 in Q2 2026, and the smart money score is near-neutral at 0.005 as of the quarter ended 30 Jun.
What would change my mind
Where this comes from: Q2 2026 results · earnings vs estimates, 28 Jul · fundamentals · peer comparison. Orin's read on ITW; not advice.
How has the share price moved?
Up 11.3% over twelve months, from $247.81 on 27 Oct 2025 to $275.93 at the Tue 27 Oct 2026 close. Its highest close in that time was $299.60 on 13 Feb 2026; the last close is 7.9% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 3.6M, on 3 Feb 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
- Rose flags: large share sales by the company's own officers and directors, from the Form 4 each one files after trading.
On file
All ITW filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $6.3B | 0.1% |
| Vanguard Capital Management | $4.7B | 0.1% |
| State Street | $3.5B | 0.1% |
| Northern Trust | $3.0B | 0.3% |
| Geode Capital Management | $1.9B | 0.1% |
| Vanguard Portfolio Management | $1.9B | 0.1% |
| Morgan Stanley | $1.3B | 0.1% |
| Capital Research Global Investors | $1.3B | 0.2% |
| Wells Fargo | $1.2B | 0.2% |
| Goldman Sachs Group | $1.1B | 0.1% |
116 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 130 Form 4 filings; open-market trades net −$67.0M. Of the 50 on hand, 1 was an open-market purchase and 5 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about ITW
Orin answers questions about ITW from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 24.6× its last 12 months of profit (Tue 27 Oct close) — higher than in 3 of its last 5 fiscal years (middle 23.4×); the typical Industrials company on the NYSE is at 33.7×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 24.6×near usual | 23.4× | 33.7× |
| P/S | 4.72×near usual | 4.73× | — |
| EV/EBITDA | 18.3×above usual | 17.2× | — |
| P/B | 25.3×above usual | 22.3× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $277 (from $254 to $297) — 0% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$277
$254 – $297 · +0% against the last close
- 0 buy or overweight
- 7 hold
- 4 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 24.6× its last 12 months of profit; the middle P/E of the 10 companies it is compared to that made a profit is 29.1×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| ITWIllinois Tool Works Inc. | $79B | 24.6× | 18.3× | 44.3% | 19.4% | 103% |
| AMEAMETEK, Inc. | $56B | 35.8× | 24.0× | 36.6% | 20.0% | 15% |
| DCIDonaldson Company, Inc. | $10B | 21.8× | 15.1× | 34.6% | 11.7% | 28% |
| DOVDover Corporation | $28B | 23.9× | 15.2× | 39.7% | 13.6% | 15% |
| EMREmerson Electric Co. | $91B | 33.9× | 18.9× | 53.4% | 14.1% | 13% |
| EPACEnerpac Tool Group Corp. | $2B | 19.9× | 12.6× | 49.0% | 14.7% | 22% |
| IRIngersoll Rand Inc. | $29B | 30.8× | 16.5× | 37.9% | 12.1% | 9% |
| NDSNNordson Corporation | $18B | 32.7× | 20.9× | 55.3% | 18.6% | 18% |
| PHParker-Hannifin Corporation | $113B | 30.2× | 21.2× | 37.7% | 16.6% | 25% |
| SNASnap-on Incorporated | $18B | 18.3× | 12.4× | 51.2% | 20.0% | 17% |
| SXIStandex International Corporation | $3B | 28.0× | 14.5× | 41.7% | 11.7% | 14% |
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 24.6× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now24.6×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Industrials companies on the NYSE were priced at a typical 33.7× their yearly profit (Tue 27 Oct close).
- Now33.7×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $188 a share — 32% below the $275.77 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $188 | 32% below $275.77 |
| Levered | $164 | 41% below $275.77 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.