Illinois Tool Works Inc. (NYSE: ITW) stock jumped 0.42% on Friday to $209.42 against a previous-day closing price of $208.54. With 1.1 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.13 million shares. During the session, the Specialty Industrial Machinery company that operates in wider Industrials sector, reached to the highest price of $210.45 whereas the lowest price it dropped to was $207.58. The 52-week range on ITW shows that it touched its highest point at $249.81 and its lowest point at $173.52 during that stretch. It currently has a 1-year price target of $191.94. With its current market cap of 62.10 billion, ITW has annualized dividend of $4.88 while the current yield stands at 2.33%. Beta for the stock currently stands at 1.12.
Price Performance and Earnings:
Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ITW was up-trending over the past week, with a rise of 2.91%, but this was up by 14.92% over a month. Three-month performance dropped to -1.69% while six-month performance fell -11.25%. The stock lost -7.99% in the past year, while it has lost -15.15% so far this year. A look at the trailing 12-month EPS for ITW yields 8.51 with Next year EPS estimates of 9.69. For the next quarter, that number is 2.20. This implies an EPS growth rate of 28.50% for this year and 7.23% for next year. EPS is expected to grow by 7.46% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 8.40%.
Float and Shares Shorts:
At present, 312.50 million ITW shares are outstanding with a float of 310.46 million shares on hand for trading. On Jul 14, 2022, short shares totaled 5.73 million, which was 1.84% higher than short shares on Jun 14, 2022. In addition to Mr. E. Scott Santi as the firm’s Chairman & CEO, Mr. Michael M. Larsen serves as its Sr. VP & CFO.
Through their ownership of 81.38% of ITW’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 47.58% of ITW, in contrast to 33.93% held by mutual funds. Shares owned by individuals account for 12.19%. As the largest shareholder in ITW with 8.29% of the stake, Briar Hall Management LLC holds 25,831,684 shares worth 25,831,684. A second-largest stockholder of ITW, The Vanguard Group, Inc., holds 24,451,110 shares, controlling over 7.85% of the firm’s shares. State Farm Investment Management is the third largest shareholder in ITW, holding 21,029,900 shares or 6.75% stake. With a 2.65% stake in ITW, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 8,259,053 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 2.01% of ITW stock, is the second-largest Mutual Fund holder. It holds 6,272,963 shares valued at 1.14 billion. MFS Value Fund holds 1.51% of the stake in ITW, owning 4,686,551 shares worth 854.12 million.
An Overview of Recent Financials:
Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2022, ITW reported revenue of $3.94B and operating income of $895.00M. Over the past year, revenue came in at $14.85B while operating income stood at $3.47B. It generated $662.00M net income for the quarter, which came to $2.69B over the last twelve months. The EBITDA in the recently reported quarter was $1.01B and diluted EPS was $2.11. EBITDA for the full year was $3.92B.
Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ITW since 21 analysts follow the stock currently. There are 3 analysts who recommend BUY ratings, while 3 suggest SELL ratings. Of the remaining analysts, 15 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With ITW analysts setting a high price target of $236.00 and a low target of $176.00, the average target price over the next 12 months is $202.29. Based on these targets, ITW could surge 12.69% to reach the target high and fall by -15.96% to reach the target low. Reaching the average price target will result in a decline of -3.4% from current levels.
EPS: Estimates vs Actual
It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. ITW will report FY 2022 earnings on 02/03/2023. Analysts have provided yearly estimates in a range of $9.23 being high and $8.90 being low. For ITW, this leads to a yearly average estimate of $9.04. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Illinois Tool Works Inc. surprised analysts by $0.16 when it reported $2.37 EPS against a consensus estimate of $2.21. The surprise factor in the prior quarter was $0.05. Based on analyst estimates, the high estimate for the next quarter is $2.40 and the low estimate is $2.18. The average estimate for the next quarter is thus $2.26.
Summary of Insider Activity:
Insiders traded ITW stock several times over the past three months with 9 Buys and 1 Sells. In these transactions, 7,728 shares were bought while 1,000 shares were sold. The number of buy transactions has increased to 39 while that of sell transactions has risen to 23 over the past year. The total number of shares bought during that period was 501,279 while 201,701 shares were sold.