Illinois Tool Works, Inc.
ITW - Insider Information
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+ FollowMarket Cap$79.56B
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Earnings Call Q3 2026
October 27, 2026 - AI Summary
Strong Q3 performance (top & bottom line):
- Revenue +4.4% YoY driven by ~3.8% organic growth, with modest FX (+0.3%) and acquisitions (+0.3%).
- Operating margin +40 bps YoY to 27.8% (and +110 bps sequentially), aided by ~130 bps from “enterprise initiatives.”
- GAAP EPS +7% to $3.00, beating internal estimate despite a ~$0.10 tax headwind (tax rate 24.4% vs 21.8% prior year).
- Free cash flow (FCF) $851M = ~100% of net income; YTD FCF > $2B, ~82% of net income.
Orders/demand momentum & “Customer Back Innovation” (CBI) are the core bull case:
- Organic growth 4%, or ~5% excluding a welding tornado hit.
- Management highlighted accelerating order growth in welding and test & measurement electronics (orders growing faster than revenue).
- CBI contribution “step-up”: >3% to revenue growth YTD vs 2.4% in 2025; now projected to exceed 3% for full-year 2026—called the single biggest catalyst to achieve sustained 4%+ organic growth.
- Strong segment demand supports 2027 confidence (not just backlog).
Forecasts/outlook raised for 2026; 2027 framed as momentum-driven:
- Full-year GAAP EPS guidance raised by $0.05 to $11.45–$11.55 (midpoint $11.50) = ~10% YoY growth; this is the 3rd guidance increase in 2026.
- Organic growth outlook maintained at 3%–4% for the year (management expects Q4 to be 5%+ organic).
- Operating margin guidance unchanged at 26.5%–27.5%; expects Q4 margins in the mid-to-high 27s (implies margin improvement and “bucking” typical seasonality).
- Capital allocation: dividend +7% (63rd consecutive annual increase). YTD shareholder returns $2.7B via buybacks/dividends; full-year buybacks ~ $1.5B (FCF conversion expected ~100% of net income).
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$168.15
42.7% downside
Current Fair Value
42.7% downsideOvervalued by 42.7% based on the discounted cash flow analysis.
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Share Statistics
| Market cap | $79.56 Billion |
|---|---|
| Enterprise Value | $88.54 Billion |
| Annual dividend | $6.55 |
| Dividend yield | 2.35% |
| Earnings per Share | $10.52 |
| Beta | 0.98 |
| Outstanding Shares | 284,600,000 |
Return
| Return on Equity | 111.54% |
|---|---|
| Return on Assets | 19.56% |
| Return on Invested Capital | 42.59% |
Valuation & Multiples
| P/E Ratio | 24.8 |
|---|---|
| PEG | 598.95 |
| Price to Sales | 5.06 |
| Price to Book Ratio | 29.35 |
| Enterprise Value to Revenue | 5.32 |
| Enterprise Value to EBIT | 19.71 |
| Enterprise Value to Net Income | 27 |
| Total Debt to Enterprise | 0.11 |
| Debt to Equity | 3.39 |
Revenue Sources
No data
Last Earnings Call
Report Date
October 27, 2026
EPS Estimate
$2.97
Consensus analyst estimateRevenue Estimate
$4.26 B
Consensus analyst estimateNext Earnings Call
Expected Date
February 2, 2027
EPS Estimate
$2.97
Consensus analyst estimateRevenue Estimate
$4.29 B
Consensus analyst estimateInstitutional Put/Call Ratio
Compares institutional put options with call options. At 0.00, the ratio is below 1, so institutions hold more calls than puts.
| Put/Call Ratio | 0.0000▼ 28.96% |
|---|---|
| Total Calls | -▼ 100.00% |
| Total Puts | 5,000▼ 97.72% |
Institutional Ownership
Holdings and activity of institutional investors.
| Ownership % | 3.79%▼ 81.90% |
|---|---|
| Total Invested | $2.79B▼ 95.79% |
| Investors Holding | 831▼ 1182.00% |
About Illinois Tool Works, Inc.
43,000 employees
CEO: Ernest Santi
Illinois Tool Works Inc. (ITW) is a diversified global manufacturer and supplier of industrial goods and specialized equipment. The company structures its operations across seven distinct divisions. The Automotive OEM segment focuses on ...