Here's Why You Should Hold Illinois Tool (ITW) Stock for Now
Illinois Tool Works Inc. ITW is gaining from robust demand across most of its businesses despite inflationary pressures and supply-chain challenges. Its Automotive OEM (Original Equipment Manufacturer) segment is benefiting from strong organic growth in North America, Europe and China which is boosting revenues. The Food Equipment unit segment is driven by growth across both North America and International operations.
Continued strength in the semiconductor business is aiding the company’s Test & Measurement and Electronics segment. The Welding segment is benefiting due to robust equipment and consumables manufacturing operations and industrial business. Continued strength in industrial applications, construction, U.S. residential and commercial end-markets are supporting the growth of the Polymers & Fluids segment.
Illinois Tool believes in strengthening its businesses through the addition of assets. The acquisition of MTS Systems Corporation’s test and simulation business in December 2021 added value to ITW’s Test & Measurement and Electronics segment. The MTS buyout boosted its sales by 3% in the third quarter of 2022, year over year. For 2022, management predicts the MTS buyout to boost sales by 3%.
ITW’s measures to reward its shareholders through dividend payments and share buybacks are noteworthy. In third-quarter 2022, it paid out dividends of $1.22 per share to its shareholders, representing a 7% increase from the year-ago period’s level. Also, in the first nine months of 2022, Illinois Tool bought back shares of $500 million.
Illinois Tool Works Inc. Price
Illinois Tool Works Inc. price | Illinois Tool Works Inc. Quote
Considering the above-mentioned positives, we believe, investors should retain the Illinois Tool stock for now, as suggested by its current Zacks Rank #3 (Hold).
Zacks Rank and Key Picks
Some better-ranked companies from the Industrial Products sector are discussed below:
Applied Industrial Technologies, Inc. AIT presently has a Zacks Rank #1 (Strong Buy) and a trailing four-quarter earnings surprise of 24.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
AIT’s earnings estimates have increased 4.6% for fiscal 2023 (ending June 2023) in the past 60 days. Shares of Applied Industrial have risen 25.1% in the past six months.
IDEX Corporation IEX presently has a Zacks Rank of #2 (Buy). IEX’s earnings surprise in the last four quarters was 5.7%, on average.
In the past 60 days, IDEX’s earnings estimates have increased 1.8% for 2022. The stock has rallied 20.7% in the past six months.
EnerSys ENS delivered an average four-quarter earnings surprise of 2.1%. ENS presently carries a Zacks Rank of 2.
ENS’ earnings estimates have increased 0.6% for fiscal 2023 (ending March 2023) in the past 60 days. The stock has gained 9% in the past six months.
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Illinois Tool Works Inc. (ITW) : Free Stock Analysis Report
Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report
IDEX Corporation (IEX) : Free Stock Analysis Report
Enersys (ENS) : Free Stock Analysis Report
