Illinois Tool Works Inc. (ITW) Stock Analysis — Fair Value, Risk & Moat Rating
NYQ · Industrials · Specialty Industrial Machinery
Is Illinois Tool Works Inc. a safe investment right now?
Illinois Tool Works Inc.'s Altman Z-Score of 8.13 places it in the safe zone. Our fair value estimate is $233.28 (Fairly Valued). Moat rating: 3.7/5 stars.
Could Illinois Tool Works Inc. go bankrupt? Altman Z-Score analysis
Z-Score of 8.13 is above 3.0, indicating the company is financially healthy by this metric.
- Below 1.8 — Distress Zone (high bankruptcy risk)
- 1.8 to 3.0 — Gray Zone (elevated uncertainty)
- Above 3.0 — Safe Zone (financially healthy)
What drives ITW's Z-Score?
| Component | Formula | Value | Weight | Contribution |
|---|---|---|---|---|
| A · Working Capital / Total Assets | WC / TA | 0.0665 | 1.2 | 0.08 |
| B · Retained Earnings / Total Assets | RE / TA | 1.8671 | 1.4 | 2.61 |
| C · EBIT / Total Assets | EBIT / TA | 0.2637 | 3.3 | 0.87 |
| D · Market Cap / Total Liabilities | MCap / TL | 5.9569 | 0.6 | 3.57 |
| E · Revenue / Total Assets | Rev / TA | 0.9936 | 1.0 | 0.99 |
How has ITW's financial health changed over time?
| Year | Z-Score | Zone |
|---|---|---|
| 2022 | 8.13 | Safe |
| 2023 | 8.17 | Safe |
| 2024 | 8.82 | Safe |
| 2025 | 8.13 | Safe |
Source: Calculated from ITW's latest 10-K filing on SEC EDGAR.
What is Illinois Tool Works Inc. actually worth?
How we calculated this
| Input | Value | Source |
|---|---|---|
| Predicted EPS (α) | $10.80 | Proprietary blend of reported actuals + analyst consensus, weighted by α |
| Last Year EPS | $10.49 | Annual report (SEC EDGAR) |
| Analyst Consensus EPS (This Year) | $11.27 | 16 analysts consensus |
| Trailing P/E | 25.4x | Current market pricing |
| Fair P/E (β discount) | 21.6x | Trailing PE adjusted by value discount factor β, hard-capped |
| Earnings Trend (γ) | Growing | Directional signal: predicted vs trailing EPS |
Wall Street Reference: Analyst consensus target price is $275.88 (16 analysts). This is shown for reference only and is not used in our valuation model.
Source: Earnings data from SEC EDGAR filings. Market data via Yahoo Finance.
Does Illinois Tool Works Inc. have a durable competitive advantage?
Moat rating: 3.7/5.
What makes up ITW's moat score?
ROIC Stability
ROIC variability over the past decade. Score: 4/5.
Gross Margin Trend
Gross margin trajectory over the past decade. Score: 4/5.
Switching Costs
Estimated customer lock-in based on margin level. Score: 3/5.
How stable is ITW's return on invested capital?
| Year | ROIC | Trend |
|---|---|---|
| 2022 | 37.3% | — |
| 2023 | 36.6% | Stable |
| 2024 | 42.1% | Rising |
| 2025 | 34.9% | Declining |
Source: ROIC calculated from SEC EDGAR filings.
Is Illinois Tool Works Inc.'s dividend safe?
Can Illinois Tool Works Inc. afford its dividend?
Payout ratio is 59.3%. FCF covers the dividend 1.3x. 40 consecutive years of payments.
Illinois Tool Works Inc.'s key financial metrics
| Metric | Latest | 1Y Ago | 3Y Ago | Trend |
|---|---|---|---|---|
| Revenue | $16.0B | $15.9B | $15.9B | Stable |
| Net Income | $3.1B | $3.5B | $3.0B | Stable |
| Free Cash Flow | $2.7B | $2.8B | $1.9B | Rising |
| Gross Margin | 44.1% | 44.3% | 40.8% | Rising |
Recent events that affect our ITW analysis
ITW earnings report scheduled
Upcoming report. Consensus EPS estimate: $2.56. Revenue estimate: $4.01B. Our current Fair Value: $233.28 — a significant beat or miss could shift this estimate.
ITW analyst consensus: 11% bullish (2 of 18 analysts)
1 Strong Buy, 1 Buy, 10 Hold, 4 Sell, 2 Strong Sell. Consensus target: $275.88 (3.3% upside). Compare with our independent Fair Value: $233.28.
ITW paid $1.6100/share dividend
Dividend Safety Grade: A. Payout ratio: 59.3%.
ITW filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
ITW filed annual report (10-K)
Annual filing with full-year financials. Our Altman Z-Score, Moat, and Fair Value models are derived from this data. View on SEC EDGAR →
ITW beat EPS estimates by 1.2%
Reported EPS: $2.72 vs estimate $2.69. Earnings strength supports our Fair Value of $233.28 (12.7% below current price).
ITW filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
ITW paid $1.6100/share dividend
Dividend Safety Grade: A. Payout ratio: 59.3%.
ITW beat EPS estimates by 4.0%
Reported EPS: $2.81 vs estimate $2.70. Earnings strength supports our Fair Value of $233.28 (12.7% below current price).
ITW filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
ITW filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
ITW paid $1.6100/share dividend
Dividend Safety Grade: A. Payout ratio: 59.3%.
ITW filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
ITW beat EPS estimates by 0.5%
Reported EPS: $2.58 vs estimate $2.57. Earnings strength supports our Fair Value of $233.28 (12.7% below current price).
ITW filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
ITW paid $1.5000/share dividend
Dividend Safety Grade: A. Payout ratio: 59.3%.
ITW filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
ITW filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
ITW beat EPS estimates by 1.1%
Reported EPS: $2.38 vs estimate $2.35. Earnings strength supports our Fair Value of $233.28 (12.7% below current price).
ITW filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
ITW paid $1.5000/share dividend
Dividend Safety Grade: A. Payout ratio: 59.3%.
ITW filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
ITW filed annual report (10-K)
Annual filing with full-year financials. Our Altman Z-Score, Moat, and Fair Value models are derived from this data. View on SEC EDGAR →
ITW beat EPS estimates by 1.9%
Reported EPS: $2.54 vs estimate $2.49. Earnings strength supports our Fair Value of $233.28 (12.7% below current price).
ITW filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
Common questions about Illinois Tool Works Inc.
What is Illinois Tool Works Inc. stock price today?
Illinois Tool Works Inc. (ITW) stock price is $267.09 as of the latest market close, traded on the NYSE exchange.
What does Illinois Tool Works Inc. do?
Illinois Tool Works Inc. provides industrial products and equipment in North America, Europe, the Middle East, Africa, the Asia Pacific, and South America. It operates through seven segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products.
What is Illinois Tool Works Inc. market cap?
Illinois Tool Works Inc. has a market capitalization of $76.98B, classifying it as a large-cap stock in the Industrials sector.
What sector and industry is ITW in?
Illinois Tool Works Inc. operates in the Industrials sector, specifically within the Specialty Industrial Machinery industry. It trades on the NYSE under the ticker symbol ITW.
Is ITW stock overvalued or undervalued?
Based on our valuation model, Illinois Tool Works Inc. trades 14.5% above our fair value estimate — potentially overvalued.
- FairValueLabs Fair Value: $233.28
- Current Price: $267.09
- Valuation Zone: Fairly Valued
What is ITW stock forecast and analyst target price?
Based on 16 Wall Street analysts, the consensus price target for Illinois Tool Works Inc. is $275.88, implying upside of 3.3% from the current price.
- Analyst High Target: $310.00
- Analyst Low Target: $219.00
Note: Analyst targets are shown for reference and are not used in our valuation model.
Is Illinois Tool Works Inc. revenue and earnings growing?
Here are the analyst consensus growth estimates for Illinois Tool Works Inc.:
- Revenue growth (current year est.): 3.2%
- EPS growth (current year est.): 7.4%
- Revenue growth (next year est.): 3.5%
- EPS growth (next year est.): 7.5%
What are Illinois Tool Works Inc.'s key financial metrics?
| Metric | Latest | Trend |
|---|---|---|
| Revenue | $16.0B | Stable |
| Net Income | $3.1B | Stable |
| Free Cash Flow | $2.7B | Rising |
| Gross Margin | 44.1% | Rising |
What is ITW's P/E ratio?
The price-to-earnings ratio measures how much investors pay per dollar of earnings:
- Trailing P/E (last 12 months): 25.4x
- Forward P/E (next 12 months est.): 22.0x
- FairValueLabs Fair P/E: 21.6x
How volatile is ITW stock?
Illinois Tool Works Inc. has a beta of 1.15, meaning it is somewhat more volatile than the broader market. A beta above 1.0 indicates higher price swings relative to the S&P 500, while below 1.0 suggests more stability.
How much cash and debt does Illinois Tool Works Inc. have?
Illinois Tool Works Inc.'s balance sheet shows:
- Total Cash: $851.0M
- Total Debt: $9.21B
- Net Cash Position: $-8.36B
A positive net cash position means the company holds more cash than debt, reducing financial risk.
What is Illinois Tool Works Inc.'s free cash flow?
Illinois Tool Works Inc. generated $2.17B in trailing twelve-month free cash flow (from $3.13B in operating cash flow). Free cash flow represents the cash available for dividends, buybacks, and debt reduction after all capital expenditures.
Does Illinois Tool Works Inc. pay a dividend, and is it safe?
Yes, Illinois Tool Works Inc. pays a regular dividend. Here are the key metrics:
- Dividend Yield: 2.3%
- Payout Ratio: 59.3%
- Consecutive Years Paid: 40
- 5-Year Dividend Growth: -19.4%
- FairValueLabs Safety Grade: A
Is Illinois Tool Works Inc. at risk of going bankrupt?
Illinois Tool Works Inc.'s Altman Z-Score is 8.13, placing it in the safe zone (above 3.0) — bankruptcy risk is low. The Z-Score uses five balance sheet ratios to predict bankruptcy probability within two years.
Does Illinois Tool Works Inc. have a durable competitive advantage?
Illinois Tool Works Inc. scores 3.7/5 stars (Solid moat · eroding) in our moat analysis:
- ROIC Stability: 4/5
- Gross Margin Trend: 4/5
- Switching Costs: 3/5
A score above 3.5 suggests meaningful pricing power and a defensible market position.
What is ITW's return on equity (ROE)?
Illinois Tool Works Inc.'s return on equity is 93.7%. ROE measures how efficiently a company generates profits from shareholder equity. An ROE above 15% is generally considered strong, while below 10% may signal inefficiency.
How do I buy ITW stock?
ITW shares can be purchased through any brokerage account that provides access to the NYSE. Common steps:
- Open an account with a broker (e.g., Fidelity, Schwab, Interactive Brokers)
- Search for ticker symbol ITW
- Place a market or limit order for your desired number of shares
This is not investment advice. Always do your own research before buying any stock.
Is ITW a value stock or speculative?
FairValueLabs classifies Illinois Tool Works Inc. as Value Investment. It exhibits consistent profitability, reasonable valuation, and financial stability — characteristics of a traditional value investment.
Who is the CEO of Illinois Tool Works Inc.?
The current CEO of Illinois Tool Works Inc. is Mr. Christopher A. O'Herlihy.
What is ITW's earnings per share (EPS)?
Earnings per share measures the company's profit allocated to each outstanding share:
- Trailing EPS (last 12 months): $10.50
- Forward EPS (next 12 months est.): $12.14
- Analyst consensus EPS (this year): $11.27
- Analyst consensus EPS (next year): $12.12
Other Industrials companies analyzed by FairValueLabs
FairValueLabs Disclaimer
All valuations, scores, ratings, and classifications on this page are produced by the FairValueLabs internal valuation system. They do not represent actual market value, guaranteed outcomes, or professional investment advice. These are analytical estimates for educational and research purposes only.
This is not financial advice. All data is sourced from SEC EDGAR public filings. Always consult a qualified financial advisor before making investment decisions.
Last updated: Apr 22, 2026. Data sources: SEC EDGAR (financial statements), Yahoo Finance (market data, analyst consensus). Data may not reflect the most recent quarter.
ITW analysis methodology: How we calculate fair value, Z-Scores, and moat ratings