Illinois Tool Works (ITW)
NYSEIndustrialsSpecialty Industrial MachinerySnapshot 2026-07-08
$271.06-1.17%
Close 2026-07-07 · 1-day change
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Track ITW free→NYSEIndustrialsSpecialty Industrial MachinerySnapshot 2026-07-08
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Track ITW free→A long-form read on the 1–3 year hold thesis. Slower and deeper than the daily snapshot — it refreshes only when the evidence moves.
This is a durable compounder with a focus on steady revenue and earnings growth. The current thesis is intact, supported by strong recent financial performance, though execution quality remains fragile.
The market seems to have priced in a neutral valuation, with expectations for modest growth. ITW is currently viewed as full compared to its peers, indicating that while there is some premium, it is not excessive.
Management is on track to achieve its revenue and earnings goals, with recent results showing strong year-over-year growth. However, the mixed performance in free cash flow conversion suggests some variability in execution.
The long-term thesis hinges on sector performance, particularly the results of key industry peers like GEV, ETN, and PH. Any changes in guidance from these companies could significantly impact ITW's trajectory.
Overall, ITW appears to be in a stable position for the next few years, but its success will depend on broader industry trends and management's ability to maintain execution quality. Not investment advice.
The most important moves since the prior daily snapshot.
Yes, our read has strengthened. The latest earnings beat supports this improvement, indicating that recent financial performance remains strong. There are no current threats to the thesis.
as of 2026-07-08
Specific, dated things to watch for, each with what would confirm it and what would prove it wrong.
Why it matters: Earnings per share below guidance may show problems in making money.
Confirms:Q2 GAAP EPS reported below $2.77.
Disproves:Q2 GAAP EPS meets or exceeds $2.77.
Why it matters: This would signal that ITW is struggling to meet its growth targets. It could indicate weakening demand or operational issues.
Confirms:Q2 revenue growth reported below 2%.
Disproves:Q2 revenue growth reported above 2%.
Why it matters: If the operating margin drops below 26.5%, costs may be rising. This can hurt profits.
Confirms:The operating margin is below 26.5%.
Disproves:The operating margin is above 26.5%.
Why it matters: An increase in EPS guidance would indicate strong performance and confidence in future earnings. This could boost investor sentiment.
Confirms:GAAP EPS guidance raised above $11.50.
Disproves:GAAP EPS guidance remains at or below $11.50.
Why it matters: This shows the company is making cash well. It matches management's goals for spending.
Confirms:Free cash flow reported in Q2 exceeds net income.
Disproves:Free cash flow reported in Q2 is less than net income.
Why it matters: If EPS guidance drops, it means profits may be lower. This can hurt investor trust.
Confirms:Full year EPS guidance revised down to below $11.10.
Disproves:Full year EPS guidance remains at $11.10 or higher.
Why it matters: If free cash flow conversion falls below 100%, it may show cash flow issues. This could impact share buybacks and dividends.
Confirms:Free cash flow conversion reported below 100% of net income.
Disproves:Free cash flow conversion reported above 100% of net income.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.