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What Drove Illinois Tool Works (ITW) to New 52-Week High?

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Shares of Illinois Tool Works Inc.ITW reached a new 52-week high of $144.96 during its trading session on Jun 8. This apex improved upon the last 52-week high of $144.86 on Jun 2.

In the last three months, shares of the company have yielded 8.77% return, outperforming the gain of 6.68% seen by the Zacks categorized Machinery General Industrial industry.

On Jun 2, Illinois Tool Works closed its trading session at $144.59, yielding a year-to-date return of roughly 18.7%. The trading volume for the session was approximately 1.46 million shares. Positive earnings estimate revisions for 2017 and 2018, along with an expected earnings growth rate of 7.5% for the next five years indicate the stock's potential for further price appreciation.

Growth Drivers

In the last four quarters, Illinois Tool Works reported better-than-expected results, with an average positive earnings surprise of 3.16%. Positive market sentiments after the solid performance, with a 6.21% earnings beat, in the first quarter of 2017 led to roughly 3.5% growth in the company's share price since Apr 24. A sneak peek into the results reveals that improvement in profitability was achieved on the back of lower share count due to ongoing share buyback activity as well as benefits from its enterprise initiatives.

In addition, Illinois Tool Works' positive revision in its 2017 forecasts boosted market sentiments. Earnings are expected to come within $6.20−$6.40 per share in 2017, an increase from the earlier projection of $6.00−$6.20. Organic revenue growth is expected to be 2−4%, an improvement over the prior forecast of 1.5−3.5%. Margin profile will strengthen further on the back of benefits from enterprise initiatives.

Over the last 60 days, the Zacks Consensus Estimate for the stock increased 2.6% to $6.34 for 2017 and 1.2% to $7.00 for 2018. These estimates represent year-over-year growth of 12.46% for 2017 and 10.31% for 2018.

Illinois Tool Works Inc. Price and Consensus

Illinois Tool Works Inc. Price and Consensus | Illinois Tool Works Inc. Quote

Zacks Rank & Stocks to Consider

With a market capitalization of $49.95 million, Illinois Tool Works currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the machinery industry include Kennametal Inc. KMT , Parker-Hannifin Corporation PH and Regal Beloit Corporation RBC . While both Kennametal and Parker-Hannifin sport a Zacks Rank #1 (Strong Buy), Regal Beloit carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Kennametal's earnings estimates for fiscal 2017 and fiscal 2018 were revised upward in the last 60 days. Also, the company's average earnings surprise for the last four quarters was a positive 6.24%.

Parker-Hannifin's average earnings surprise for the last four quarters was a positive 14.94%. Also, earnings expectations for fiscal 2017 and fiscal 2018 improved over the past 60 days.

Regal Beloit's earnings estimates for 2017 and 2018 were revised upward in the last 60 days. Also, the company's average earnings surprise for the last four quarters was a positive 1.48%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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