Illinois Tool Works Analyst Roundup Following Investor Meeting

Analysts commented on Illinois Tool Works Inc. ITW after the company hosted an analyst and investor day on December 5.

The company recently traded at $97.05, up 0.4 percent, following Friday’s meeting.

Below are highlights from analyst notes along with current ratings and price targets.

Stifel - Buy, $110 price target

“ITW’s Enterprise Strategy which was introduced just two years ago has significantly transformed the structure, performance, and outlook for the company as a whole. The company is progressing well toward its 2017 goals, and even increased its long term operating margin expectations from 20 percent+ to 23 percent. Management reaffirmed FY14 guidance and provided initial FY15 guide, which calls for EPS of $5.25 at the midpoint and matches the Street forecast. We continue to view shares favorably and believe that as ITW demonstrates progress against these goals the market will reward the shares with a multiple revaluation.”

Barclays - Equal Weight, $103 price target

“We think ITW's organic growth looks set to slowly increase, supported by the company's focus on innovation as well as good end market growth in some of its businesses. We believe that several of ITW's segments such as Auto, Food, and Test and Measurement could continue to lead growth especially given a focus away from frequent acquisitions. Also, ITW has limited exposure to potentially declining oil & gas markets (and lower oil-related input costs could help offset end market headwinds).”

Credit Suisse - Neutral, $87 price target

“Acquisitions will continue to play a role in ITW's longer term strategy albeit more bolt-on in nature (avg. $50-250M each, 2-3 per year) along with potential for new platform acquisitions (assuming the right opportunity becomes available/ITW not strategically focused on specific markets). ITW will remain disciplined against its capital allocation program with 25 percent of cash directed towards internal investments, 20-30 percent to dividends (growing with EPS) and 50 percent external initiatives (acquisition and share repo). Bottom line, while not a lot of new news, consistency and execution remain refreshing in a choppy market.”

Global Hunter Securities - Buy, $111 price target

“In our view, the main theme was that the ITW enterprise strategy is resulting in higher operating margins, ROIC, cash flow and sustainable EPS growth. ITW's key initiatives are expected to continue to contribute to 2015 margin expansion. We thought that the ITW meeting was focused (only three presenters), upbeat and to the point, due to the 2015 guidance, which was in line with consensus and the highlight of the meeting. In our view, the company's 2015 message was well received. We believe that investors are confident in ITW's ability to continue to progress with its refocusing through 2017.”