Based on the provided data and recent earnings report, here's a concise analysis of ITW's valuation:
ITW appears moderately overvalued at current price levels. The stock's PE ratio of 21.65 [Q4 2024] shows a premium valuation compared to the industrial sector average. The company's recent Q4 2024 performance revealed revenue decline of 1.3% to $3.932 billion, missing consensus expectations.
The EV/EBITDA ratio of 19.18 [Q4 2024] indicates the market is pricing in significant growth expectations, despite management's conservative 2025 guidance projecting only 0-2% organic growth. The company's PS ratio of 4.75 [Q4 2024] suggests investors are paying a premium for each dollar of sales.
The stock's recent price action has been weak, with shares trading down following Q4 earnings release. Management's 2025 EPS guidance of $10.15-$10.55 came in below consensus of $10.62, suggesting potential growth headwinds. Additionally, the projected total revenue decline of 1-3% for 2025 raises concerns about near-term growth prospects.
While ITW maintains strong margins and cash flows, the current valuation multiples appear stretched given the modest growth outlook and macroeconomic uncertainties. The stock's premium valuation isn't fully justified by its fundamentals at this time.