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ITW Valuation

Illinois Tool Works Inc
$
269.410
+8.41(3.222%)1D
  • Overview
  • Forecast
  • Valuation
  • Earnings

ITW Relative Valuation

ITW's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, ITW is overvalued; if below, it's undervalued.
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Historical Valuation

Illinois Tool Works Inc (ITW) is now in the Fair zone, suggesting that its current forward PE ratio of 24.34 is considered Fairly compared with the five-year average of 24.57. The fair price of Illinois Tool Works Inc (ITW) is between 237.69 to 271.30 according to relative valuation methord.
Relative Value
Fair Zone
237.69-271.30
Current Price:261.00
Fair
24.93
PE
1Y
3Y
5Y
Trailing
Forward
17.66
EV/EBITDA
Illinois Tool Works Inc. (ITW) has a current EV/EBITDA of 17.66. The 5-year average EV/EBITDA is 17.80. The thresholds are as follows: Strongly Undervalued below 15.51, Undervalued between 15.51 and 16.65, Fairly Valued between 18.94 and 16.65, Overvalued between 18.94 and 20.09, and Strongly Overvalued above 20.09. The current Forward EV/EBITDA of 17.66 falls within the Historic Trend Line -Fairly Valued range.
19.33
EV/EBIT
Illinois Tool Works Inc. (ITW) has a current EV/EBIT of 19.33. The 5-year average EV/EBIT is 19.74. The thresholds are as follows: Strongly Undervalued below 17.00, Undervalued between 17.00 and 18.37, Fairly Valued between 21.11 and 18.37, Overvalued between 21.11 and 22.48, and Strongly Overvalued above 22.48. The current Forward EV/EBIT of 19.33 falls within the Historic Trend Line -Fairly Valued range.
4.65
PS
Illinois Tool Works Inc. (ITW) has a current PS of 4.65. The 5-year average PS is 4.53. The thresholds are as follows: Strongly Undervalued below 3.84, Undervalued between 3.84 and 4.18, Fairly Valued between 4.88 and 4.18, Overvalued between 4.88 and 5.22, and Strongly Overvalued above 5.22. The current Forward PS of 4.65 falls within the Historic Trend Line -Fairly Valued range.
21.33
P/OCF
Illinois Tool Works Inc. (ITW) has a current P/OCF of 21.33. The 5-year average P/OCF is 21.78. The thresholds are as follows: Strongly Undervalued below 16.47, Undervalued between 16.47 and 19.13, Fairly Valued between 24.43 and 19.13, Overvalued between 24.43 and 27.09, and Strongly Overvalued above 27.09. The current Forward P/OCF of 21.33 falls within the Historic Trend Line -Fairly Valued range.
25.04
P/FCF
Illinois Tool Works Inc. (ITW) has a current P/FCF of 25.04. The 5-year average P/FCF is 24.52. The thresholds are as follows: Strongly Undervalued below 19.49, Undervalued between 19.49 and 22.01, Fairly Valued between 27.04 and 22.01, Overvalued between 27.04 and 29.55, and Strongly Overvalued above 29.55. The current Forward P/FCF of 25.04 falls within the Historic Trend Line -Fairly Valued range.
Illinois Tool Works Inc (ITW) has a current Price-to-Book (P/B) ratio of 23.85. Compared to its 3-year average P/B ratio of 23.31 , the current P/B ratio is approximately 2.30% higher. Relative to its 5-year average P/B ratio of 22.29, the current P/B ratio is about 7.00% higher. Illinois Tool Works Inc (ITW) has a Forward Free Cash Flow (FCF) yield of approximately 3.57%. Compared to its 3-year average FCF yield of 3.53%, the current FCF yield is approximately 1.12% lower. Relative to its 5-year average FCF yield of 3.51% , the current FCF yield is about 1.57% lower.
24.42
P/B
Median3y
23.31
Median5y
22.29
3.58
FCF Yield
Median3y
3.53
Median5y
3.51
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Competitors Valuation Multiple

The average P/S ratio for ITW's competitors is 2.17, providing a benchmark for relative valuation. Illinois Tool Works Inc Corp (ITW) exhibits a P/S ratio of 4.65, which is 114.11% above the industry average. Given its robust revenue growth of 0.65%, this premium appears unsustainable.
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Performance Decomposition

1Y
3Y
5Y
Market capitalization of ITW increased by 6.41% over the past 1 year. The primary factor behind the change was an increase in P/E Change from 22.05 to 23.58.
The secondary factor is the Revenue Growth, contributed 0.65%to the performance.
Overall, the performance of ITW in the past 1 year is driven by P/E Change. Which is more unsustainable.
0.65%
4.03B → 4.05B
Revenue Growth
+
-1.17%
18.85 → 18.63
Margin Expansion
+
6.93%
22.05 → 23.58
P/E Change
=
6.41%
253.18 → 269.41
Mkt Cap Growth

FAQ

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Is Illinois Tool Works Inc (ITW) currently overvalued or undervalued?

Illinois Tool Works Inc (ITW) is now in the Fair zone, suggesting that its current forward PE ratio of 24.34 is considered Fairly compared with the five-year average of 24.57. The fair price of Illinois Tool Works Inc (ITW) is between 237.69 to 271.30 according to relative valuation methord.
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What is Illinois Tool Works Inc (ITW) fair value?

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How does ITW's valuation metrics compare to the industry average?

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What is the current P/B ratio for Illinois Tool Works Inc (ITW) as of Aug 23 2025?

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What is the current FCF Yield for Illinois Tool Works Inc (ITW) as of Aug 23 2025?

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What is the current Forward P/E ratio for Illinois Tool Works Inc (ITW) as of Aug 23 2025?

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What is the current Forward P/S ratio for Illinois Tool Works Inc (ITW) as of Aug 23 2025?