NEW YORK (TheStreet) -- Argus upgraded Illinois Tool Works (ITW) to "buy" from "hold" and set a $102 price target. The firm believes the company is well managed and deserves to trade at a premium valuation.
The stock was up 0.4% to $87.18 in pre-market trading on Wednesday.
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Separately, TheStreet Ratings team rates ILLINOIS TOOL WORKS as a "buy" with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate ILLINOIS TOOL WORKS (ITW) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 6.2%. Since the same quarter one year prior, revenues slightly increased by 4.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.89, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.14, which illustrates the ability to avoid short-term cash problems.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Machinery industry average. The net income increased by 33.6% when compared to the same quarter one year prior, rising from $354.00 million to $473.00 million.
- Compared to where it was 12 months ago, this stock has enjoyed a nice rise of 26.08% which was in line with the performance of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- ILLINOIS TOOL WORKS has improved earnings per share by 14.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ILLINOIS TOOL WORKS reported lower earnings of $3.62 versus $4.74 in the prior year. This year, the market expects an improvement in earnings ($4.55 versus $3.62).
- You can view the full analysis from the report here: ITW Ratings Report