Start here if you're new
what it is
ITW makes tools, equipment, and parts that keep factories, kitchens, and job sites running.
how it gets paid
Last year Ill. Tool Works made $16.0B in revenue. Construction and Welding was the main engine at $3.8B, or 24% of sales.
why it's growing
Revenue grew 0.9% last year. Revenue was up 194% vs. prior year, and EPS was up 177%.
what just happened
ITW posted $12.0B in quarterly revenue, and EPS reached $7.77.
At a glance
A balance sheet — strong enough to weather a downturn
95/100 earnings predictability — you can trust these numbers
24.1x trailing p/e — priced about right
2.6% dividend yield — cash in your pocket every quarter
37.0% return on capital — every dollar works hard here
xvary composite: 86/100 — above average
What they do
ITW makes tools, equipment, and parts that keep factories, kitchens, and job sites running.
ITW is already inside 84 divisions across 51 countries. You do not rip out a supplier that touches your plant, kitchen line, or welding shop unless the replacement brings downtime and paperwork. That stickiness matters because 46% of sales come from outside the U.S., so one weak region does not break the $16.0B machine.
How they make money
$16.0B
annual revenue · their business grew +0.9% last year
Automotive OEM
$3.2B
Test & Measurement and Electronics
$2.8B
Food Equipment
$2.7B
Construction and Welding
$3.8B
Polymers, Fluids, and Specialty
$3.5B
The products that matter
supplies auto manufacturers
Automotive OEM
part of a $16.0B revenue base
automotive is one of the end markets management called weak, with demand down low single digits recently. that matters because the whole company only grew 0.9% last year. weakness in one big lane shows up fast when the company is growing this slowly.
cyclical exposure
equips commercial kitchens
Food Equipment
inside a 19.6% margin business
food equipment helps explain why ITW behaves like more than a one-industry bet. the page is thin on segment revenue, so we are not pretending otherwise. what you do know is that the companywide 19.6% net margin says mix and pricing are still doing their job.
mix support
sells job-site components
Construction Products
tied to the same $16.0B sales base
construction sits near the center of the macro debate. when management guides to $16.0B–$16.4B revenue, this is one of the places you watch to see whether that range holds or starts looking optimistic.
macro tell
Key numbers
$276
18-mo target
That is about 10% above $251.57. The market is not calling this cheap, just less expensive than a panic sell.
31.0%
operating margin
That means 31 cents of every sales dollar stays after operating costs. Most industrial names would love that kind of cushion.
37.0%
return on capital
For every dollar ITW puts into the business, it gets $0.37 back in profit. That is the kind of math that keeps a stock expensive.
2.6%
dividend yield
You get 2.6% just to wait. That is better than cash and worse than a miracle.
Financial health
A
strength
- balance sheet grade A — very strong financial position
- risk rank 1 — safer than 95% of stocks
- price stability 100 / 100
- long-term debt $7.7B (10% of capital)
- net profit margin 21.3% — keeps 21 cents of every dollar in revenue
- return on equity 74% — $0.74 profit for every $1 investors have put in
A with balance sheet grade and risk rank standing out. your money faces less risk here than at most public companies.
Total return vs. market
You invested $10,000 in ITW 3 years ago → it's now worth $12,240.
The index would have given you $13,920.
source: institutional data · total return
What just happened
beat estimates
ITW posted $12.0B in quarterly revenue, and EPS reached $7.77.
Revenue was up 194% vs. prior year, and EPS was up 177%. Yahoo also shows the last earnings print at $2.72 versus $2.68 expected, a 1.49% beat.
$12.0B
revenue
$7.77
eps
194%
revenue vs. last year
the number that mattered
$12.0B is the number that mattered because it says the business still throws off huge scale, even when its end markets are weak.
-
bottom-line growth probably remained muted at illinois tool works (itw) last year.
-
indeed, if management’s late-october prognostications were right, the diversified manufacturer’s share profit inched just 2.4%–3.3% higher, to between $10.40 and $10.50 in 2025, down from the previous year’s somewhat healthier 4.4% advance.
-
leadership’s key assumptions included revenues of $16.0 billion–$16.4 billion (up 1%–3% on the year) and operating margin improvement of 90 basis points (bps) at best and a 10-bp narrowing in a worst-case scenario.
-
the company’s myriad end markets have generally been weak of late.to that point, leadership recently figured that they were cumulatively down low single digits on a percentage basis in the recent third quarter. on the plus side, a majority of itw’s business units outperformed relevant industry benchmarks, led by an autoparts segment that is having success capturing more business with makers of electric vehicles in china.
-
the company is side-stepping tariffs fairly well.that’s because itw largely manufactures where it sells, thus limiting its exposure to cross-border supply chains that have been the target of tariffs.
source: company earnings report, 2026
Get this snapshot in your inbox
This page, delivered free — plus weekly updates when the numbers change. plain english, no spam.
weekly updates
earnings alerts
plain english
no spam
What could go wrong
ITW's risk is not balance-sheet stress. it's paying a premium multiple for a business that only grew 0.9% last year and needs industrial demand to stop feeling sleepy.
med
end-market softness lasts longer
management already said end markets were down low single digits in the recent third quarter. with revenue at $16.0B and growth only 0.9% last year, there is not much room for another step down in automotive or construction.
if those markets stay weak, ITW can still defend margins. the stock is the part that gets less patient.
med
margin expansion does not show up
management's own operating margin outlook spans from 10 basis points of contraction to 90 basis points of expansion. that is the gap between a clean earnings story and one that starts looking mostly financial engineering plus discipline.
if margin lands near the weak end of that range, the bull case shrinks into a dividend story at 24.1x earnings.
med
valuation loses its benefit of the doubt
ITW trades at 24.1x trailing earnings despite only 0.9% revenue growth and a 3-year return that trailed the index. quality deserves a premium. permanent forgiveness is a different product.
if estimates slip from $11.30 without a stronger demand backdrop, the multiple can do the downside work all by itself.
with the whole company producing $16.0B in annual revenue, demand does not need to fall apart to matter. flat is enough to pressure the thesis.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
next earnings report
watch whether management keeps revenue inside the $16.0B–$16.4B frame and whether the latest quarter keeps EPS on the $11.30 path.
trend
end-market demand
auto and construction were already down low single digits. if that gets worse, the top line feels it first.
risk
operating margin range
the real spread is 10 basis points of contraction versus 90 basis points of expansion. that's the swing factor for near-term EPS quality.
metric
estimate revisions
fy2026 EPS sits at $11.30 and revenue at $17B. when those numbers move, the valuation argument moves with them.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — in human-speak, analysts think this stock has a better next 12 months than most names in the coverage set.
risk profile
safest 5%
stability score 1 — lower risk than almost any stock in the coverage universe.
chart momentum
below average
technical score 4 — the business looks steadier than the chart does right now.
earnings predictability
95 / 100
management tends to deliver what it sketches out. you usually do not get drama here.
source: institutional data
Institutional activity
institutions have been net selling for 3 consecutive quarters — 742 buyers vs. 763 sellers in 3q2025. total institutional holdings: 0.2B shares. net selling for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$215
$337
$252
current price
$276
target midpoint · +10% from current · 3-5yr high: $385 (+55% · 13% ann'l return)
Want the deeper analysis?
The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
see plans from $5/moThe deep dive