NYSE · Industrials

Illinois Tool Works Inc.

ITW · Specialty Industrial Machinery

$251.03

▼ -4.44 (-1.74%)

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Mr. Market is currently offering Illinois Tool Works Inc. at $251.03.

The business passes only 3 of 7 of Graham's defensive criteria — well below his required standard.

Overall Grade

Defensive

Enterprising

Profitability A

Gross Profit Margin 44.1%

Operating Margin 26.3%

Net Income Margin 19.1%

Fin. Health C

Years to Pay Off Debt 3.0 yrs

Working Capital vs Long-Term Debt -$5.6B

Working Capital $1.1B

Valuation F

Margin of Safety 0.0%

Price-to-Book 22.42x

Cash Flow A

Free Cash Flow $2.7B

CapEx % of Net Income 13.7%

Owner Earnings $3.9B

3/7

Graham Score

Speculative

Defensive — Graham's strict criteria (P/B, P/E, dividends, stability) · Enterprising — Profitability & cash flow focused, accepts higher valuations for quality

Market Data

Market Cap $72.3B

Enterprise Value $82.0B

P/E (TTM) 23.29

Dividend Yield 2.48%

Exchange NYSE

Key Margins

Gross Profit 44.1%

Operating Margin 26.3%

Net Margin 19.1%

Company Info

Sector Industrials

Industry Specialty Industrial Machinery

Employees 43000

Country United States

Visit website

📖

Full Graham Analysis

Mr. Market is currently offering Illinois Tool Works Inc. at $251.03.

The business passes only 3 of 7 of Graham's defensive criteria — well below his required standard.

At $251.03, the stock trades at a 388% premium to its Graham Number of $51.40. Graham would consider this price speculative.

There is no margin of safety at the current price. Graham would advise patience and waiting for a better entry point.

Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign..

Conclusion: By Graham's standards, this stock is speculative at its current price. The intelligent investor would look elsewhere or wait.

About Illinois Tool Works Inc.

Illinois Tool Works Inc. provides industrial products and equipment in North America, Europe, the Middle East, Africa, the Asia Pacific, and South America. It operates through seven segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products. The Automotive OEM segment offers plastic and metal components, fasteners, and assemblies for automobiles, light trucks, and other industrial uses. The Food Equipment segment provides warewashing, cooking, refrigeration, and food processing equipment; kitchen exhaust, ventilation, and pollution control systems; and food equipment maintenance and repair services. The Test & Measurement and Electronics segment produce and sells test and measurement; and electronic manufacturing and maintenance, repair, and operations solutions. The Welding segment produces arc welding equipment, and metal arc welding consumables and related accessories. The Polymers & Fluids segment produces adhesives, sealants, lubrication and cutting fluids, and fluids and polymers for auto aftermarket maintenance and appearance. The Construction Products segment offers engineered fastening systems and solutions for the residential construction, renovation/remodel, and commercial construction markets. The Specialty Products segment provides beverage packaging equipment and consumables, product coding and marking equipment and consumables, and appliance components and fasteners. The company serves automotive OEM and aftermarket, commercial food equipment, construction, general industrial, industrial capital goods, consumer durables, and other markets, as well as MRO markets. It distributes its products directly to industrial manufacturers, as well as through independent distributors. Illinois Tool Works Inc. was founded in 1912 and is based in Glenview, Illinois.

Showing Key Metrics

Income Highlights

Metric	2025	2024	2023	2022
Gross Profit %	44.1% ▼	44.3%	42.2%	40.8%
Operating Margin %	26.3% ▼	26.8%	25.1%	23.8%
Net Income %	19.1% ▼	21.9%	18.4%	19.0%
Diluted EPS	10.49 ▼	11.71	9.74	9.77

Balance Sheet Highlights

Metric	2025	2024	2023	2022	2021
Total Assets	$16.1B	$15.1B	$15.5B	$15.4B	N/A
Total Debt	$9.2B ↑	$8.1B	$8.4B	$7.9B	N/A
Working Capital	$1.1B ▼	$1.5B	$1.6B	$1.8B	N/A
Years to Pay Debt	3.00	2.32	2.83	2.62	N/A

Cash Flow Highlights

Metric	2025	2024	2023	2022	2021
Free Cash Flow	$2.7B ▼	$2.8B	$3.1B	$1.9B	N/A
Owner Earnings	$3.9B	$4.3B	$3.8B	$3.9B	N/A
CapEx % of Net Income	13.7%	12.5%	15.4%	13.6%	N/A

Income Statement

	2025	2024	2023	2022
Tax Effect Of Unusual Items	-7,943	78,150	-8,136	40,530
Tax Rate For Calcs	0	0	0	0
Normalized EBITDA	4,690,000	4,737,000	4,520,000	4,262,000
Total Unusual Items	-35,000	370,000	-36,000	193,000
Total Unusual Items Excluding Goodwill	-35,000	370,000	-36,000	193,000
Net Income From Continuing Operation Net Minority Interest	3,066,000	3,488,000	2,957,000	3,034,000
Reconciled Depreciation	397,000	402,000	395,000	410,000
Reconciled Cost Of Revenue	8,652,000	8,557,000	9,034,000	9,153,000
EBITDA	4,655,000	5,107,000	4,484,000	4,455,000
EBIT	4,258,000	4,705,000	4,089,000	4,045,000
Net Interest Income	-252,000	-239,000	-215,000	-181,000
Interest Expense	292,000	283,000	266,000	203,000
Interest Income	40,000	44,000	51,000	22,000
Normalized Income	3,093,057	3,196,150	2,984,864	2,881,530
Net Income From Continuing And Discontinued Operation	3,066,000	3,488,000	2,957,000	3,034,000
Total Expenses	11,828,000	11,634,000	12,067,000	12,142,000
Total Operating Income As Reported	4,216,000	4,264,000	4,040,000	3,790,000
Diluted Average Shares	292,300	297,800	303,600	310,700
Basic Average Shares	291,500	296,800	302,600	309,600
Diluted EPS	0	0	0	0
Basic EPS	0	0	0	0
Diluted NI Availto Com Stockholders	3,066,000	3,488,000	2,957,000	3,034,000
Net Income Common Stockholders	3,066,000	3,488,000	2,957,000	3,034,000
Net Income	3,066,000	3,488,000	2,957,000	3,034,000
Net Income Including Noncontrolling Interests	3,066,000	3,488,000	2,957,000	3,034,000
Net Income Continuous Operations	3,066,000	3,488,000	2,957,000	3,034,000
Tax Provision	900,000	934,000	866,000	808,000
Pretax Income	3,966,000	4,422,000	3,823,000	3,842,000
Other Income Expense	2,000	397,000	-2,000	233,000
Other Non Operating Income Expenses	37,000	27,000	34,000	40,000
Special Income Charges	0	363,000	1,000	191,000
Gain On Sale Of Business	0	363,000	1,000	191,000
Gain On Sale Of Security	-35,000	7,000	-37,000	2,000
Net Non Operating Interest Income Expense	-252,000	-239,000	-215,000	-181,000
Interest Expense Non Operating	292,000	283,000	266,000	203,000
Interest Income Non Operating	40,000	44,000	51,000	22,000
Operating Income	4,216,000	4,264,000	4,040,000	3,790,000
Operating Expense	2,859,000	2,776,000	2,751,000	2,713,000
Depreciation Amortization Depletion Income Statement	80,000	101,000	113,000	134,000
Depreciation And Amortization In Income Statement	80,000	101,000	113,000	134,000
Amortization	80,000	101,000	113,000	134,000
Amortization Of Intangibles Income Statement	80,000	101,000	113,000	134,000
Selling General And Administration	2,779,000	2,675,000	2,638,000	2,579,000
Gross Profit	7,075,000	7,040,000	6,791,000	6,503,000
Cost Of Revenue	8,969,000	8,858,000	9,316,000	9,429,000
Total Revenue	16,044,000	15,898,000	16,107,000	15,932,000
Operating Revenue	16,044,000	15,898,000	16,107,000	15,932,000

Balance Sheet

	2025	2024	2023	2022	2021
Treasury Shares Number	261,400	256,000	250,661	245,000
Ordinary Shares Number	288,600	294,000	299,339	305,000
Share Issued	550,000	550,000	550,000	550,000
Net Debt	8,118,000	6,915,000	7,099,000	7,055,000
Total Debt	9,211,000	8,078,000	8,370,000	7,949,000
Tangible Book Value	-2,464,000	-2,115,000	-2,554,000	-2,544,000
Invested Capital	12,194,000	11,179,000	11,176,000	10,851,000
Working Capital	1,074,000	1,548,000	1,560,000	1,810,000
Net Tangible Assets	-2,464,000	-2,115,000	-2,554,000	-2,544,000
Capital Lease Obligations	242,000	215,000	206,000	186,000
Common Stock Equity	3,225,000	3,316,000	3,012,000	3,088,000
Total Capitalization	9,908,000	9,624,000	9,351,000	9,261,000
Total Equity Gross Minority Interest	3,226,000	3,317,000	3,013,000	3,089,000
Minority Interest	1,000	1,000	1,000	1,000
Stockholders Equity	3,225,000	3,316,000	3,012,000	3,088,000
Gains Losses Not Affecting Retained Earnings	-1,827,000	-1,877,000	-1,834,000	-1,841,000
Other Equity Adjustments	-1,827,000	-1,877,000	-1,834,000	-1,841,000
Treasury Stock	26,875,000	25,375,000	23,870,000	22,377,000
Retained Earnings	30,150,000	28,893,000	27,122,000	25,799,000
Additional Paid In Capital	1,771,000	1,669,000	1,588,000	1,501,000
Capital Stock	6,000	6,000	6,000	6,000
Common Stock	6,000	6,000	6,000	6,000
Total Liabilities Net Minority Interest	12,922,000	11,750,000	12,505,000	12,333,000
Total Non Current Liabilities Net Minority Interest	7,796,000	7,442,000	7,830,000	7,873,000
Other Non Current Liabilities	574,000	633,000	554,000	506,000
Employee Benefits	205,000	224,000	312,000	306,000
Non Current Pension And Other Postretirement Benefit Plans	205,000	224,000	312,000	306,000
Tradeand Other Payables Non Current		0	151,000	273,000	365,000
Non Current Deferred Liabilities	154,000	119,000	326,000	484,000
Non Current Deferred Taxes Liabilities	154,000	119,000	326,000	484,000
Long Term Debt And Capital Lease Obligation	6,863,000	6,466,000	6,487,000	6,304,000
Long Term Capital Lease Obligation	180,000	158,000	148,000	131,000
Long Term Debt	6,683,000	6,308,000	6,339,000	6,173,000
Current Liabilities	5,126,000	4,308,000	4,675,000	4,460,000
Other Current Liabilities				1,000
Current Deferred Liabilities	340,000	360,000	395,000	427,000
Current Deferred Revenue	340,000	360,000	395,000	427,000
Current Debt And Capital Lease Obligation	2,348,000	1,612,000	1,883,000	1,645,000
Current Capital Lease Obligation	62,000	57,000	58,000	55,000
Current Debt	2,286,000	1,555,000	1,825,000	1,590,000
Other Current Borrowings	999,000	777,000	1,361,000	537,000
Commercial Paper	1,287,000	778,000	464,000	1,053,000
Pensionand Other Post Retirement Benefit Plans Current	463,000	421,000	455,000	466,000
Payables And Accrued Expenses	1,975,000	1,915,000	1,942,000	1,921,000
Current Accrued Expenses	771,000	738,000	755,000	780,000
Payables	1,204,000	1,177,000	1,187,000	1,141,000
Dividends Payable	465,000	441,000	419,000	400,000
Total Tax Payable	217,000	217,000	187,000	147,000
Income Tax Payable	217,000	217,000	187,000	147,000
Accounts Payable	522,000	519,000	581,000	594,000
Total Assets	16,148,000	15,067,000	15,518,000	15,422,000
Total Non Current Assets	9,948,000	9,211,000	9,283,000	9,152,000
Other Non Current Assets	828,000	804,000	771,000	715,000
Defined Pension Benefit	388,000	305,000	243,000	251,000
Non Current Deferred Assets	519,000	369,000	479,000	494,000
Non Current Deferred Taxes Assets	519,000	369,000	479,000	494,000
Goodwill And Other Intangible Assets	5,689,000	5,431,000	5,566,000	5,632,000
Other Intangible Assets	591,000	592,000	657,000	768,000
Goodwill	5,098,000	4,839,000	4,909,000	4,864,000
Net PPE	2,524,000	2,302,000	2,224,000	2,060,000
Accumulated Depreciation	-4,362,000	-4,027,000	-4,075,000	-3,904,000
Gross PPE	6,886,000	6,329,000	6,299,000	5,964,000
Construction In Progress	299,000	270,000	294,000	259,000
Other Properties	294,000	266,000	248,000	212,000
Machinery Furniture Equipment	4,389,000	4,043,000	4,070,000	3,891,000
Buildings And Improvements	1,705,000	1,562,000	1,490,000	1,414,000
Land And Improvements	199,000	188,000	197,000	188,000
Current Assets	6,200,000	5,856,000	6,235,000	6,270,000
Other Current Assets	226,000	147,000	157,000	175,000
Assets Held For Sale Current			0	8,000	0
Prepaid Assets	60,000	60,000	55,000	52,000
Inventory	1,659,000	1,605,000	1,707,000	2,054,000
Inventories Adjustments Allowances		0	-117,000	-111,000	-118,000
Finished Goods	828,000	777,000	848,000	1,050,000
Work In Process	191,000	193,000	234,000	228,000
Raw Materials	640,000	635,000	742,000	887,000
Receivables	3,404,000	3,096,000	3,251,000	3,273,000
Taxes Receivable	177,000	105,000	128,000	102,000
Accounts Receivable	3,227,000	2,991,000	3,123,000	3,171,000
Allowance For Doubtful Accounts Receivable	-26,000	-24,000	-29,000	-26,000
Gross Accounts Receivable	3,253,000	3,015,000	3,152,000	3,197,000
Cash Cash Equivalents And Short Term Investments	851,000	948,000	1,065,000	708,000
Cash And Cash Equivalents	851,000	948,000	1,065,000	708,000

Cash Flow

	2025	2024	2023	2022	2021
Free Cash Flow	2,707,000	2,844,000	3,084,000	1,936,000
Repurchase Of Capital Stock	-1,500,000	-1,500,000	-1,500,000	-1,750,000
Repayment Of Debt	0	-1,926,000	-679,000	-1,113,000
Issuance Of Debt	0	1,606,000	1,425,000	593,000
Issuance Of Capital Stock	65,000	52,000	53,000	29,000
Capital Expenditure	-419,000	-437,000	-455,000	-412,000
Interest Paid Supplemental Data	279,000	248,000	260,000	199,000
Income Tax Paid Supplemental Data	1,052,000	1,180,000	1,026,000	993,000
End Cash Position	851,000	948,000	1,065,000	708,000
Beginning Cash Position	948,000	1,065,000	708,000	1,527,000
Effect Of Exchange Rate Changes	42,000	-65,000	3,000	-57,000
Changes In Cash	-139,000	-52,000	354,000	-762,000
Financing Cash Flow	-2,744,000	-3,189,000	-2,782,000	-3,000,000
Cash Flow From Continuing Financing Activities	-2,744,000	-3,189,000	-2,782,000	-3,000,000
Net Other Financing Charges	-32,000	-38,000	-14,000	-13,000
Cash Dividends Paid	-1,785,000	-1,695,000	-1,615,000	-1,542,000
Common Stock Dividend Paid	-1,785,000	-1,695,000	-1,615,000	-1,542,000
Net Common Stock Issuance	-1,435,000	-1,448,000	-1,447,000	-1,721,000
Common Stock Payments	-1,500,000	-1,500,000	-1,500,000	-1,750,000
Common Stock Issuance	65,000	52,000	53,000	29,000
Net Issuance Payments Of Debt	508,000	-8,000	294,000	276,000
Net Short Term Debt Issuance	508,000	312,000	-452,000	796,000
Net Long Term Debt Issuance	0	-320,000	746,000	-520,000
Long Term Debt Payments	0	-1,926,000	-679,000	-1,113,000
Long Term Debt Issuance	0	1,606,000	1,425,000	593,000
Investing Cash Flow	-521,000	-144,000	-403,000	-110,000
Cash Flow From Continuing Investing Activities	-521,000	-144,000	-403,000	-110,000
Net Other Investing Changes	-2,000	-10,000	-2,000	-1,000
Net Investment Purchase And Sale	7,000	11,000	27,000	12,000
Sale Of Investment	7,000	11,000	27,000	12,000
Net Business Purchase And Sale	-118,000	280,000	7,000	276,000
Sale Of Business	1,000	395,000	7,000	278,000
Purchase Of Business	-119,000	-115,000	0	-2,000
Net PPE Purchase And Sale	-408,000	-425,000	-435,000	-397,000
Sale Of PPE	11,000	12,000	20,000	15,000
Purchase Of PPE	-419,000	-437,000	-455,000	-412,000
Operating Cash Flow	3,126,000	3,281,000	3,539,000	2,348,000
Cash Flow From Continuing Operating Activities	3,126,000	3,281,000	3,539,000	2,348,000
Change In Working Capital	-406,000	-18,000	210,000	-816,000
Change In Other Working Capital	-135,000	-70,000	-72,000	-35,000
Change In Payables And Accrued Expense	-77,000	-117,000	-116,000	154,000
Change In Accrued Expense	-48,000	-74,000	-102,000	119,000
Change In Payable	-29,000	-43,000	-14,000	35,000
Change In Account Payable	-29,000	-43,000	-14,000	35,000
Change In Tax Payable					49,000
Change In Income Tax Payable					49,000
Change In Prepaid Assets	-136,000	-41,000	-26,000	-19,000
Change In Inventory	34,000	176,000	360,000	-455,000
Change In Receivables	-92,000	34,000	64,000	-461,000
Changes In Account Receivables	-92,000	34,000	64,000	-461,000
Other Non Cash Items	9,000	-112,000	-8,000	-6,000
Stock Based Compensation	69,000	61,000	69,000	63,000
Provisionand Write Offof Assets	5,000	-1,000	6,000	5,000
Deferred Tax	-17,000	-176,000	-88,000	-150,000
Deferred Income Tax	-17,000	-176,000	-88,000	-150,000
Depreciation Amortization Depletion	397,000	402,000	395,000	410,000
Depreciation And Amortization	397,000	402,000	395,000	410,000
Amortization Cash Flow	80,000	101,000	113,000	134,000
Amortization Of Intangibles	80,000	101,000	113,000	134,000
Depreciation	317,000	301,000	282,000	276,000
Operating Gains Losses	3,000	-363,000	-2,000	-192,000
Gain Loss On Investment Securities			-2,000	-9,000	-29,000
Gain Loss On Sale Of PPE	3,000	0	-1,000	-1,000
Gain Loss On Sale Of Business	0	-363,000	-1,000	-191,000
Net Income From Continuing Operations	3,066,000	3,488,000	2,957,000	3,034,000

These metrics estimate what Illinois Tool Works Inc. is worth based on its fundamentals — independent of what the market currently prices it at. Graham's Fair Value and NCAV are conservative floors rooted in 1930s–60s principles. EPV assumes zero growth. None are price targets — they are reference points for judging whether the current price offers a margin of safety.

Graham's Fair Value

$51.40

Margin of Safety

Market Cap ÷ Company Value

3.07

P/B Ratio

22.42

Warren's Owner Earnings

$3.9B

Latest fiscal year

Graham's 7 Criteria

Defensive Investor Checklist

3/7 — Speculative Investor

✅ Adequate Size

$16.0B

vs > $1.5B revenue

❌ Strong Financial Condition

1.21x

vs Current Ratio > 2.0x

✅ Earnings Stability

No loss years (4 yrs data)

vs No negative EPS years

✅ Dividend Record

2.48%

vs Uninterrupted dividends

❌ Earnings Growth

+7.4% EPS growth

vs > 33% EPS growth

❌ Moderate P/E Ratio

23.3x

vs P/E ≤ 15.0x

❌ Moderate Price-to-Book

22.42x P/B (P/E×P/B: 522.2)

vs P/B ≤ 1.5x | P/E × P/B ≤ 22.5

Net Current Asset Value

$-23.33

Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign.

"Buy at two-thirds of net current assets." — Graham

Earnings Power Value

$162.61

Per share, no-growth floor. Compare to current price.

Cash Flow Analysis

Metric	2025	2024	2023	2022	2021
Capital Expenditure % of Net Income	13.7%	12.5%	15.4%	13.6%	N/A
Repurchase of Capital Stock	-$1.5B	-$1.5B	-$1.5B	-$1.8B	N/A
Free Cash Flow	$2.7B ▼	$2.8B ▼	$3.1B ▲	$1.9B •	N/A •
Warren's Owner Earnings	$3.9B	$4.3B	$3.8B	$3.9B	N/A

Peers & Industry

No auto-detected peers for Specialty Industrial Machinery. You can manually compare ITW against any stock using the Compare tool.

"The management of a business is its most important single factor — more important than market position, patents, or financial structure."

— Benjamin Graham

Capital Allocation & Alignment

Insider Ownership

0.38%

Low — management has little skin in the game

Return on Equity (ROE)

95.1%

Excellent — management generates strong returns on equity

Return on Assets (ROA)

19.0%

Strong — management uses assets efficiently

Share Buybacks (Latest Year)

$1.5B

Management is returning capital to shareholders via buybacks

Debt Trend YoY

+14.0% YoY

Debt is growing — management is leveraging up

Leadership Team

Christopher O'Herlihy

President, CEO & Director

Age 61

Pay: $4,455,265

0.145% of net income

Michael Larsen

Senior VP & CFO

Age 56

Pay: $3,210,588

0.105% of net income

Kenneth Escoe

Executive Vice President of Specialty Products

Age 49

Pay: $1,527,920

0.050% of net income

Axel Beck

Executive Vice President of Food Equipment

Age 59

Pay: $1,623,227

0.053% of net income

Erin Linnihan

Vice President of Investor Relations

Top Institutional Holders

Institution	% Owned	Shares
Vanguard Group Inc	9.33%	26,887,218
Briar Hall Management LLC	8.97%	25,850,978
Blackrock Inc.	7.68%	22,119,573
State Farm Mutual Automobile Insurance Co	7.30%	21,029,900
State Street Corporation	4.37%	12,596,511
Northern Trust Corporation	3.95%	11,383,141
Geode Capital Management, LLC	2.41%	6,944,651
Wells Fargo & Company	2.27%	6,544,483

Risk Analysis

Beta (Market Risk)

1.05

Moderate volatility — moves slightly more than market

Short Interest

3.1% of float

Low short interest — market is not heavily bearish

Debt-to-Equity

2.83x

High leverage — significant financial risk

Current Ratio

1.19x

Adequate liquidity

52-Week Price Range

Low: $236.68 Current: $251.03 High: $303.16

Currently at 22% of 52-week range

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