Illinois Tool Works Inc.

ITW
Financial Analysis · Updated May 12, 2026 · Coverage 2026-Q2
Latest Q Revenue
$4.0B
Q1 2026 · +4.6% YoY
TTM ROIC
29.3%
FY2025 · After-Tax Operating Income (NOPAT) / Average Invested Capital (Net PP&E + Goodwill + Other Intangibles + Working Capital) — ITW non-GAAP management definition · WACC ~10% · Moat spread +19.3pp

Financial Snapshot

ticker: ITW step: 04 generated: 2026-05-12 source: quick-research

Illinois Tool Works Inc. (ITW) — Financial Snapshot

Income Statement Summary

Metric FY2022 FY2023 FY2024 FY2025 YoY (25v24)
Revenue $15.93B $16.11B $15.90B $16.04B +0.9%
Gross Margin ~41% ~42% ~43% ~44% +100 bps
Operating Margin ~24% ~25% ~25% 26.3% +130 bps
Net Income $3.03B $3.50B $3.31B $3.30B ~flat
EPS (diluted, GAAP) $9.82 $10.40 $10.15 $10.49 +3.3%
After-tax ROIC ~28% ~29% ~28% 29.3% +130 bps

Q1 FY2026 Print (Apr 2026)

  • Revenue: +5%
  • Operating margin: 25.4% (+60 bps)
  • GAAP EPS: $2.66 (+12% YoY)

Cash Flow & Balance Sheet (FY2025)

Metric Value
Operating Cash Flow ~$3.7B
Capex ~$420M
Free Cash Flow ~$3.3B
Cash & Investments ~$0.9B
Total Debt ~$8.3B
Net Debt ~$7.4B

Capital Return (FY2025)

  • Completed multi-year $3.38B share repurchase program, reducing share count by 4.54%
  • 50+ consecutive years of dividend increases (Dividend King)
  • Annual dividend per share: ~$6.30 (FY2025)
  • Buyback program contributes ~$0.20 / +2% to annual EPS growth

Key Ratios (approximate, May 2026)

  • P/E (TTM): ~22x | EV/EBITDA: ~16x | FCF Yield: ~4.7%
  • Revenue Growth (TTM): ~1% | Operating Margin: 26.3%
  • After-tax ROIC: 29.3% (one of the highest among industrials)
  • Dividend Yield: ~2.6%

Segment Mix (FY2025)

  • Automotive OEM: ~21% revenue; growth +6% (organic +2%)
  • Food Equipment: ~16% revenue; +4% (organic +1%)
  • Test & Measurement / Electronics: ~16%; +6% revenue, +110 bps operating margin to 28.1%
  • Welding: ~12%
  • Polymers & Fluids: ~11%; +7% revenue, +110 bps margin to 29.0%
  • Construction Products: ~11%; -2%
  • Specialty Products: ~13%

Growth Profile

ITW is a mature industrial compounder with disciplined exposure to seven diversified end markets. The defining feature of the financial profile is structurally rising margins driven by "Enterprise Initiatives" — internal operational improvements, sourcing programs, and PLS (Product Line Simplification) discipline — which contributed 130 bps to FY2025 operating margins and are guided to contribute another ~100 bps in FY2026. Organic revenue growth is structurally low-single-digits (0–3% range guided for 2026), with buybacks adding ~2% to EPS growth. Customer-Back Innovation contributed 2.4% to 2025 revenue growth (40 bps higher than 2024).

Forward Estimates

2026 guidance (as raised after Q1):

  • Total revenue growth 2–4% (organic 1–3%)
  • Operating margin 26.5–27.5%
  • GAAP EPS $11.10–$11.50 (~8% growth at midpoint)
  • ~100 bps margin contribution from Enterprise Initiatives

Bull-side scenarios pencil in cyclical auto recovery + margin expansion to 28%+ + continued buybacks driving EPS toward $13 by FY2028. Bear-side scenarios reflect that ITW already trades at premium multiples — even with consistent execution, the multiple may be a ceiling on returns, and downside emerges if PLS drag persists or auto cycle weakens.

Deeper Financial Analysis

The fundamental tier adds 9 additional research dimensions for $ITW.

Revenue Breakdown
Segment revenue, geographic mix, product-line contribution margins, and cohort dynamics.
Financial Trends
Quarter-over-quarter momentum, leading indicators, and inflection point analysis.
Balance Sheet
Debt structure, liquidity runway, dilution risk, and working capital dynamics.
Capital Allocation
Buyback cadence, M&A appetite, dividend policy, and reinvestment priorities.
Returns on Capital (ROIC)
Multi-year ROIC vs. WACC, marginal returns on reinvestment, sales-to-invested-capital efficiency, and moat spread.
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