Illinois Tool Works Inc Stock Buy Recommendation Reiterated (ITW)
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- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 42.49% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ITW should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- ILLINOIS TOOL WORKS has improved earnings per share by 12.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ILLINOIS TOOL WORKS increased its bottom line by earning $4.07 versus $2.89 in the prior year. This year, the market expects an improvement in earnings ($4.10 versus $4.07).
- The current debt-to-equity ratio, 0.49, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, ITW has a quick ratio of 1.75, which demonstrates the ability of the company to cover short-term liquidity needs.
- 38.40% is the gross profit margin for ILLINOIS TOOL WORKS which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 11.64% is above that of the industry average.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Machinery industry average. The net income increased by 3.2% when compared to the same quarter one year prior, going from $507.62 million to $524.00 million.
--Written by a member of TheStreet Ratings Staff. Holiday Special: Subscribe to Action Alerts PLUS to see how Jim Cramer trades his $2.5 Million+ portfolio for 51% off the list price. Your first 14-days are FREE: Sign up today to get e-mail alerts before every trade
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