Illinois Tool Works (ITW) - Get Report shares are lower Monday after analysts at Goldman Sachs downgraded the industrial products and equipment manufacturer to sell from neutral, saying the stock is relatively expensive.
"The crux of our call is that while we continue to view ITW as a high-quality company, ... there is downside risk to estimates and the valuation premium is unwarranted given deteriorating fundamentals," analyst Joe Ritchie said in a Sept. 23 note.
"Specifically, we expect organic growth to continue to be anemic": down 1.5% in the second half and up 1.1% in 2020, the analyst wrote.
He expects the Glenview, Ill., company to make some acquisitions valued at $100 million to $500 million but "we don't expect [the M&A] to be transformative."
The stock has risen nearly 25% year to date. The analyst has a $144 price target on ITW, 7.1% below the stock's Friday closing price at $155.06. The shares on Monday are trading off 0.4% at $154.37.
Shares of the Charlotte provider of aerospace products and services, control technologies and performance materials are trading off 0.4% at $167.62.