With a market cap of $80.9 billion, Illinois Tool Works Inc. (ITW) is a leading global manufacturer of a diversified range of industrial products and equipment. The Glenview, Illinois-based company serves a broad range of industries, including automotive, construction, food equipment, and general industrial markets, by offering innovative solutions such as fastening systems, welding equipment, and food processing technology.
Companies worth more than $10 billion are generally labeled as “large-cap” stocks and Illinois Tool Works fits this criterion perfectly. With a global distribution network, ITW reaches customers directly and through independent distributors, maintaining a strong presence in both domestic and international markets.
Despite an 1.8% decline from its 52-week high of $279.13 reached on Nov. 27, shares of this company have risen 11.1% over the past three months, outpaced the Industrial Select Sector SPDR Fund’s (XLI) 9% return over the same time frame.
However, in the longer term, ITW stock is up 4.6% on a YTD basis, lagging behind XLI’s 22.2% gain. Shares of ITW have gained 9.8% over the past 52 weeks, compared to XLI’s 27.9% return over the same time frame.
Yet, ITW has been trading above its 50-day moving average since mid-August and it stayed above its 200-day moving average since mid-September.
Shares of Illinois Tool Works rose 3.2% on Oct. 30 due to the company raising its 2024 profit forecast, citing gains from a recent divestiture and a lower projected tax rate. ITW's increased annual profit guidance, now expecting $11.63 per share to $11.73 per share, surpassed the previous range of $10.30 to $10.40. Despite a slight revenue decline, the company reported a stronger-than-expected Q3 adjusted earnings of $2.65 per share. Additionally, ITW’s stable operating margin of 26.5%, strong cash flow generation, and plans to repurchase $1.5 billion worth of shares contributed to the positive market reaction.
ITW has lagged behind its rival, Parker-Hannifin Corporation (PH), which saw a 48.9% increase on a YTD basis and a 56.4% gain over the past 52 weeks.
As ITW has underperformed the broader sector over the past year, analysts remain cautious about its prospects. The stock has a consensus rating of “Hold” from 17 analysts' coverage, and as of writing, ITW is trading above the mean price target of $266.33.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. More news from Barchart- This Penny Stock Just Surged 380% on a Mega Deal. Is It a Buy, Sell, or Hold?
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