Illinois Tool Works, Inc.

Illinois Tool Works, Inc.

ITW

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Market Cap$82.56B
Close$

Compare to Similar Companies

P/E RatioDividendsReturn on EquityPrice-to-SalesDebt-to-Equity
Illinois Tool Works, Inc.Illinois Tool Works, Inc.25.92.24%110%53.4

Earnings Call Q2 2026

July 28, 2026 - AI Summary

Q2 results were very strong—new “peak” profitability - Revenue +6.1% YoY: +4.5% organic, +1.4% FX, +0.2% acquisitions - Operating margin +40 bps to 26.7% (and enterprise initiatives contributed ~120 bps) - Operating income $1.15B (+7.4% YoY) = most profitable quarter in ITW’s history - GAAP EPS +10% to $2.84 - Free cash flow +41% with 77% conversion (seasonal), supporting shareholder returns
Growth is accelerating vs Q1 and is concentrated in “CapEx / semiconductor-adjacent” + CBI - Organic growth rate acceleration: sequential revenue +7% (vs ~+2% historical average), with all 7 segments beating their typical sequential rate - Key segment growth drivers: - Welding organic +14% (equipment +19%), best-in-class margin 32.4% - Test & Measurement + Electronics organic +10%; Electronics +21% (~40% of segment) and strong semi-manufacturing related demand - Polymers & Fluids organic +7%; margins 29.3% (record), including Automotive Aftermarket +7% and strong biopharma/general industrial - Customer-Back Innovation (CBI) is a standout catalyst: - CBI contributed ~3% to revenue growth in the first half (vs 2.4% for full-year 2025) - Management emphasized CBI is incremental new-product revenue from products introduced in the last 3 years (cannibalization netted out) and is an incentive metric
Guidance upgrade: raised top line + bottom line; margin guidance unchanged due to temporary price/cost timing - Full-year organic growth raised to 3.5% midpoint (from prior 1–3%, now 3–4%) - GAAP EPS raised by $0.15 to $11.35–$11.55 (midpoint $11.45) = ~9% YoY growth - Operating margin guidance unchanged at 26.5%–27.5% - Implied incremental margin ~40%, but Q2 margins were pressured ~40 bps YoY by inflation-to-price timing lags - Management expects the lag to continue into Q3 (some progress) and improve further in Q4 as pricing catches up - Cash return plan: - FCF conversion projected >100% of net income - Share repurchases ~ $1.5B for 2026 - Q2 repurchased $750M (~1% of shares) at ~$255, with some Q3 timing pulled forward

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$280.71

Target Price by Analysts

2.2% downsideIllinois Tool Works Target Price DetailsTarget Price
$171.45

Current Fair Value

40.3% downside

Overvalued by 40.3% based on the discounted cash flow analysis.

Share Statistics

Market cap$82.56 Billion
Enterprise Value$91.53 Billion
Dividend Yield$6.44 (2.24%)
Earnings per Share$10.52
Beta1.01
Outstanding Shares286,400,000

Return

Return on Equity110.37%ROE
Return on Assets19.36%
Return on Invested Capital41.74%

Valuation & Multiples

P/E Ratio25.94P/E Ratio
PEG326.47PEG
Price to Sales5.03Price to Sales
Price to Book Ratio28.7Price to Book Ratio
Enterprise Value to Revenue5.56
Enterprise Value to EBIT20.79
Enterprise Value to Net Income28
Total Debt to Enterprise0.11
Debt to Equity3.39Debt to Equity

Revenue Sources

No data

Insider Trades

Last Earnings Call

Report Date
July 29, 2026
EPS Estimate
$2.80
Average shareholder expectation
Revenue Estimate
$4.19 B
Average shareholder expectation

Next Earnings Call

Expected Date
October 23, 2026
EPS Estimate
$2.97
Average shareholder expectation
Revenue Estimate
$4.24 B
Average shareholder expectation

Institutional Put/Call Ratio

Market sentiment based on institutional option activity.

Put/Call Ratio5.0000 452.33%
Total Calls1,000 99.86%
Total Puts5,000 98.50%

Institutional Ownership

Holdings and activity of institutional investors.

Ownership %4.61% 79.14%
Total Invested$3.53B 94.38%
Investors Holding923 1045.00%

ESG Score

No data

About Illinois Tool Works, Inc.

CEO: Ernest Santi

Relevant Senate Committees

Joint Committee on Taxation

This committee provides the official analysis and scoring for all tax legislation. Its technical expertise and reports directly influence corporate tax structures, capital investment credits, and other tax policies that are critical to ITW's financial planning and profitability.

Finance

This committee controls taxation and trade policy. Corporate tax rates, R&D credits, and international trade agreements/tariffs directly impact ITW's profitability, investment decisions, global supply chain costs, and market competitiveness.

Appropriations

This committee directly allocates discretionary federal spending. Its decisions on funding for infrastructure projects, defense programs, and general government procurement directly translate into potential revenue opportunities or market demand for ITW's products.

Health, Education, Labor, and Pensions

As a large employer, ITW is directly impacted by labor laws, minimum wage regulations, union policies, and workplace safety standards, which this committee oversees, significantly affecting its operational costs and human resources.

Judiciary

This committee oversees antitrust laws and intellectual property. As an acquisitive global company, antitrust reviews of ITW's mergers and the protection of its extensive intellectual property (patents) are critical to its growth strategy and competitive position.

Environment and Public Works

ITW has a construction products segment which directly benefits from infrastructure spending driven by this committee. Additionally, its manufacturing processes are subject to EPA regulations, influencing operational costs and compliance.

Foreign Relations

ITW is a global manufacturer. This committee's guidance on foreign policy, trade agreements, and sanctions directly impacts ITW's international operations, supply chains, market access, and the overall global economic environment it operates in.