Story updated at 9:55 a.m. to reflect market activity.
Shares of Illinois Tool Works were gaining 1% to $97.63 in morning trading.
The analyst firm raised its 2015 EPS estimate for the industrial goods company to $5.30 a share from $5.15 a share. Barclays analysts also set a new 2016 EPS estimate of $6.05 a share for the company.
"Following ITW's analyst day, we continue to believe that strong execution in its Enterprise Initiatives, an increasing management focus on organic growth, and generally solid end markets (with low exposure to energy) should continue to drive earnings improvement for ITW," analysts Andy Kaplowitz and Vlad Bystricky wrote.
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, notable return on equity, expanding profit margins and compelling growth in net income. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ITW's revenue growth has slightly outpaced the industry average of 2.8%. Since the same quarter one year prior, revenues slightly increased by 3.5%. 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 0.97, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, ITW has a quick ratio of 1.89, which demonstrates the ability of the company to cover short-term liquidity needs.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Machinery industry and the overall market, ILLINOIS TOOL WORKS's return on equity exceeds that of both the industry average and the S&P 500.
- 42.66% 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 14.38% 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 and the Machinery industry average. The net income increased by 17.5% when compared to the same quarter one year prior, going from $452.00 million to $531.00 million.
- You can view the full analysis from the report here: ITW Ratings Report