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Illinois Tool Works Inc ITW Stock Quote

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Morningstar‘s Stock Analysis ITW

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Illinois Tool Works' Q2 Results Slightly Below Our Expectations, but Our Valuation Is Unchanged

Joshua Aguilar Senior Analyst

Analyst Note

| Joshua Aguilar |

We see no reason to change our $205 fair value estimate following narrow-moat rated Illinois Tool Works' second-quarter results. Therefore, the stock now trades relatively in line with intrinsic value, in our view. Second-quarter revenue of $4.01 billion was slightly lower than our expectations of $4.14 billion, while GAAP EPS of $2.37 was also slightly under the $2.44 we were expecting during the quarter. Nonetheless, the company maintained its guidance, and our long-term thesis remains intact. After some puts and takes in our model, we now expect full-year GAAP EPS of $9.21, or a penny over the midpoint of the guide. That said, we currently model at the high end of the revenue guide ($15.8 billion), and the low end of the operating margin guide (24.0%). The latter is due to continuing supply chain concerns we have.

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Key Statistics ITW

Company Profile ITW

Business Description

Illinois Tool Works is a diversified global manufacturer that produces specialized industrial equipment, consumables, and related services. The firm operates 87 global divisions through seven distinct operating segments: automotive OEM, construction products, food equipment, specialty products, test/measurement and electronics, polymers and fluids, and welding. About half of its revenue comes from its operations in North America, with the remainder originating from international markets. ITW takes a bottom-up and decentralized approach to portfolio management, with the exception that each segment must apply its 80/20 operating process modeled on the Pareto principle.

155 Harlem Avenue
Glenview, IL, 60025
T +1 847 724-7500
Industry Specialty Industrial Machinery
Most Recent Earnings Jun 30, 2022
Fiscal Year End Dec 31, 2022
Stock Type Cyclical
Employees 45,000

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