UPDATE: Stifel Reiterates Buy Rating, Raises PT on Illinois Tool Works Following Announcement of Divestiture Plans

In a report published Wednesday, Stifel analyst Stanley Elliott reiterated a Buy rating on Illinois Tool Works ITW, and raised the price target from $78.00 to $83.00. In the report, Stifel noted, “Illinois Tool Works announced plans to move forward with divesting its Industrial Packaging segment. The decision comes after nearly seven months evaluating the merits of either spinning off or divesting the business. While the announcement of the sale was not a surprise to investors the increased commitment to repurchase activity was a positive. The Industrial Packaging divestiture effectively marks the completion of ITW's Portfolio Management phase, during which over 20% of the former portfolio has been divested. We remain positive on the shares and view the divestiture and accompanying accelerated share repurchasing as a sign of confidence in the progress made thus far on the Enterprise Strategy, which should drive EBIT margins in excess of 20%. We anticipate that this accelerated cash return to shareholders, through both dividends and repurchases, will support the shares price and drive further price appreciation. We are adjusting our target to $83 from $78.” Illinois Tool Works closed on Tuesday at $78.00.