Illinois Tool Works Inc. (ITW) AI Stock Analysis

Illinois Tool Works Inc. is a global manufacturer and distributor of specialized industrial products and equipment organized into seven distinct segments. Headquartered in Glenview, Illinois, and established in 1912, the company serves automotive original equipment manufacturers, commercial food service providers, construction companies, and general industrial customers. Its Automotive OEM segment produces plastic and metal components, fasteners, and assemblies. Its Food Equipment segment provides commercial kitchen equipment such as warewashing, refrigeration, cooking, and food processing systems, alongside kitchen exhaust and pollution control solutions, maintenance, and repair services to support operational hygiene and efficiency worldwide.

Between FY2021 and FY2025, revenue grew from $14.46B to $16.04B, reflecting a 5-year revenue CAGR of 5.0%. Gross margin expanded from 41.3% in FY2021 to 44.1% in FY2025, while operating margin rose from 24.1% to 26.3%. Net income reached $3.07B in FY2025 with diluted EPS of $10.49, following a peak net income of $3.49B and EPS of $10.46 in FY2024 when revenue fell 1.3%. For the latest quarter ended June 30, 2026, quarterly revenue grew 6.1% year-over-year and quarterly earnings rose 10.1% year-over-year. Trailing twelve months revenue stands at $16.47B with an operating margin of 26.9% and EPS of $11.03.

As of June 30, 2026, Illinois Tool Works held $839.0M in cash and short-term investments against $9.69B in total debt, resulting in net debt of $8.86B. Total assets stood at $16.50B against shareholders' equity of $2.89B, reflecting a debt-to-equity ratio of 3.35 and a current ratio of 1.11. In FY2025, operating cash flow reached $3.13B and free cash flow was $2.71B. The company deployed $419.0M toward capital expenditures, $1.50B for share buybacks, and $1.78B for dividends paid.

At $272.28, ITW has a market capitalization of $77.55B and an enterprise value of $85.88B. The stock trades at a trailing P/E of 24.7x, which sits below the 28.5x median of its S&P 500 Industrials peers. However, its forward P/E of 21.9x and EV-to-EBITDA of 17.8x trade at a premium to peer medians of 20.1x and 17.2x, respectively. The stock's price-to-sales ratio is 4.7x compared to the peer median of 3.1x. Over the past year, ITW generated a 13.1% return, trailing the 16.8% return of the S&P 500, while its 5-year return of 37.2% trailed the benchmark return of 83.0%.

Illinois Tool Works offers a forward annual dividend of $6.88 per share, representing a dividend yield of 2.53% and a payout ratio of 59.4%. ITW has maintained 41 consecutive years of dividend payments. Over the past 5 years, dividends have grown at an annualized rate of 7.1%. The stock's last ex-dividend date was September 30, 2026.

Wall Street coverage includes 1 Strong Buy, 12 Hold, and 3 Strong Sell recommendations across 16 analysts. The mean price target is $294.57, representing an 8.2% premium over the last close of $272.28. Consensus estimates project FY2026 EPS of $11.44 on $16.83B in revenue, followed by FY2027 EPS of $12.35 on $17.44B in revenue. ITW has beaten EPS estimates in 4 of the last 4 quarters, with its next earnings report scheduled for October 27, 2026.

This page is an AI-written research summary of Illinois Tool Works Inc. (ITW). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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