Illinois Tool Works Inc. (ITW)

FairStock Score: 64/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look at ITW as a collection of seven niche industrial businesses, from automotive OEM parts to food equipment, welding, and test and measurement. In fiscal Q2 2026 (quarter ended 2026-06-30), revenue was $4.3B, net income $815.0M, and diluted EPS $2.84. A year earlier, in fiscal Q2 2025 (quarter ended 2025-06-30), revenue was $4.1B, net income $755.0M, and diluted EPS $2.58. That is modest progress. For full fiscal 2025 (period ended 2025-12-31), revenue was $16.0B, net income $3.1B, and diluted EPS $10.49, versus fiscal 2024 revenue of $15.9B, net income $3.5B, and diluted EPS $11.71, so profits actually slipped. This fits FairStock's slow grower label, based on 5-year profit growth of 7.8% and revenue growth of 5.0%. On quality, ROCE is 16.92%, trailing free cash flow is $2.9B, and the Altman Z-Score is 6.50, with a Piotroski F-Score of 6/9. But D/E is 3.35, and ROE of 104.62% looks flattered by leverage and a thin equity base. The rub is valuation. At the 2026-10-13 close of $266.32, FairStock calculates a P/E of 24.10, P/B of 26.21, PEG of 3.03, EV/EBITDA of 17.57, and FCF yield of 3.9%. The Graham Number is $50.26, giving a margin of safety of -429.88%, meaning the price is far above a conservative asset-based yardstick. The 2.55% dividend yield is modest. The segment mix and high ROCE hint at some durable niche advantages, but the numbers do not show a wide-moat compounder growing fast enough to justify a premium multiple. I see a diversified, cash-generative industrial, but growth is slow and the price already assumes a lot.

In plain English: Illinois Tool Works makes a wide range of industrial products, including car parts, food equipment, welding gear, and testing tools. The business looks financially solid, with steady profits and cash flow, but sales and earnings are growing slowly. At the recent price, the shares look expensive compared with the company's profits and assets.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer