Illinois Tool Works manufactures and sells industrial products and equipment worldwide. It operates through seven segments: Automotive OEM; Test & Measurement and Electronics; Food Equipment; Polymers & Fluids; Welding; Construction Products; and Specialty Products. The company was founded in 1912 and is based in Glenview, Illinois.
ITW Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Illinois Tool Works Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Illinois Tool Works Inc ranked in the 39th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 22.83%. As for the metrics that stood out in our discounted cash flow analysis of Illinois Tool Works Inc, consider:
ITW's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 34.13% of tickers in our DCF set.
Relative to other stocks in its sector (Industrials), Illinois Tool Works Inc has a reliance on debt greater than just 23.25% of them.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Industrials that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as ITW, try PCAR, ROAD, WAB, AME, and HCCI.
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