Illinois Tool Works Inc. ITW
ITW remains a hold as FY2025 results show deteriorating earnings — EPS fell 10.42% to $10.49 and net income declined 12.1% — even as revenue barely grew 0.92% to $16.04B and operating margin compressed from 26.82% to 26.28%. The stock trades at a 19.8% P/E discount to the peer median (25.7x vs 32.0x), which is attractive, but near-term technical momentum has turned negative with MACD histogram at -2.04 and RSI at a neutral 48.95, while insiders are net sellers over the trailing 24 months (-128,703 shares, -$9.47M).
Multiple new institutional positions initiated in Q2 2026 13Fs — including BNY Mellon's ~$603M purchase — provide a supportive flow backdrop, but the earnings recovery needs to be confirmed before upgrading.
What could go wrong
- Earnings erosion persists. FY2025 EPS fell 10.42% to $10.49 and net income dropped 12.1% YoY; if H2 2026 does not show a clear inflection, the valuation discount may reflect deteriorating fundamentals rather than opportunity.
- High leverage. Total debt of $8.97B against stockholders' equity of $3.23B at FY2025 end creates a thin equity cushion that amplifies downside in a demand downturn.
- Insider net selling. Over 24 months insiders net sold 128,703 shares worth $9.47M; the most recent activity (August 2026) involved option exercises followed by same-day sales at ~$286-289, signaling limited insider conviction at current prices.
- Technical momentum weakening. MACD histogram turned negative at -2.04 with RSI at 48.95 as of 2026-08-24, suggesting the prior uptrend has stalled near $284 despite price remaining above the 50-day ($277.99) and 200-day ($265.47) moving averages.
What would change my mind
Where this comes from: FMP FY2025 annual + derived_metrics · FMP FY2025 annual + derived_metrics · derived_metrics FY2024 vs FY2025 · peer_relative composite. Orin's read on ITW; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All ITW filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $4.7B | 0.1% of fund |
| State Street | $3.5B | 0.1% of fund |
| Northern Trust | $3.0B | 0.3% of fund |
| Geode Capital Management | $1.9B | 0.1% of fund |
| Vanguard Portfolio Management | $1.9B | 0.1% of fund |
| Morgan Stanley | $1.3B | 0.1% of fund |
113 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 130 Form 4 filings, net −$9.5M. 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 →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 24.7× | 23.5× | 44.5× |
| EV/EBITDA | 18.9× | 17.2× | — |
| P/S | 4.78× | 4.73× | — |
| P/B | 27.1× | 22.3× | — |
Its P/E sits 60th percentile of its own last 5 years (+0.04σ from its own mean).
12.8%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $2.7B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$281
$254 – $301 · +3% against today's price
- 6 buy or overweight
- 13 hold
- 9 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| ITWIllinois Tool Works Inc. | $79B | 24.7× | 18.9× | 44.2% | 19.4% | 102% |
| AMEAMETEK, Inc. | $56B | 35.9× | 24.1× | 36.6% | 20.0% | 15% |
| CMICummins Inc. | $72B | 26.7× | 15.6× | 25.3% | 7.8% | 22% |
| CSXCSX Corporation | $87B | 27.3× | 15.8× | 54.9% | 22.2% | 24% |
| EMREmerson Electric Co. | $87B | 33.7× | 19.1× | 53.2% | 13.8% | 13% |
| HWMHowmet Aerospace Inc. | $92B | 49.0× | 34.7× | 34.4% | 20.5% | 34% |
| JCIJohnson Controls International plc | $88B | 25.3× | 27.0× | 36.7% | 14.3% | 27% |
| ROPRoper Technologies, Inc. | $37B | 15.2× | 10.7× | 69.5% | 30.2% | 13% |
| TDGTransDigm Group Incorporated | $62B | 33.5× | 18.6× | 59.6% | 21.3% | -21% |
The median is of the 8 peers listed above and nothing else — check it against the column. This company trades 18.6% below it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $205 | $252.83 · −19% | 2026-06-10 |
| Levered DCF | $178 | $252.83 · −29% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.