Intrinsic value of Illinois Tool Works - ITW

Previous Close

$145.64

  Intrinsic Value

$96.16

stock screener

  Rating & Target

sell

-34%

  Value-price divergence*

-30%

Previous close

$145.64

 
Intrinsic value

$96.16

 
Up/down potential

-34%

 
Rating

sell

 
Value-price divergence*

-30%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of ITW stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 50.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  1.45
  4.90
  4.91
  4.92
  4.93
  4.93
  4.94
  4.95
  4.95
  4.96
  4.96
  4.97
  4.97
  4.97
  4.97
  4.98
  4.98
  4.98
  4.98
  4.98
  4.99
  4.99
  4.99
  4.99
  4.99
  4.99
  4.99
  4.99
  4.99
  4.99
  5.00
Revenue, $m
  13,599
  14,265
  14,966
  15,702
  16,476
  17,289
  18,143
  19,040
  19,983
  20,974
  22,014
  23,107
  24,255
  25,461
  26,728
  28,058
  29,455
  30,923
  32,464
  34,082
  35,782
  37,566
  39,440
  41,409
  43,475
  45,646
  47,925
  50,318
  52,831
  55,470
  58,240
Variable operating expenses, $m
 
  11,190
  11,717
  12,271
  12,853
  13,465
  14,108
  14,783
  15,493
  16,238
  17,021
  17,388
  18,252
  19,159
  20,112
  21,113
  22,165
  23,269
  24,428
  25,646
  26,925
  28,268
  29,678
  31,159
  32,714
  34,348
  36,062
  37,863
  39,754
  41,740
  43,825
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  10,535
  11,190
  11,717
  12,271
  12,853
  13,465
  14,108
  14,783
  15,493
  16,238
  17,021
  17,388
  18,252
  19,159
  20,112
  21,113
  22,165
  23,269
  24,428
  25,646
  26,925
  28,268
  29,678
  31,159
  32,714
  34,348
  36,062
  37,863
  39,754
  41,740
  43,825
Operating income, $m
  3,064
  3,075
  3,248
  3,431
  3,622
  3,823
  4,035
  4,257
  4,490
  4,736
  4,993
  5,719
  6,004
  6,302
  6,616
  6,945
  7,291
  7,654
  8,035
  8,436
  8,857
  9,298
  9,762
  10,249
  10,761
  11,298
  11,862
  12,455
  13,077
  13,730
  14,415
EBITDA, $m
  3,534
  3,733
  3,917
  4,109
  4,312
  4,525
  4,748
  4,983
  5,230
  5,489
  5,761
  6,048
  6,348
  6,664
  6,995
  7,343
  7,709
  8,093
  8,496
  8,920
  9,365
  9,832
  10,322
  10,837
  11,378
  11,946
  12,543
  13,169
  13,827
  14,517
  15,242
Interest expense (income), $m
  212
  251
  269
  288
  307
  328
  349
  372
  396
  421
  447
  475
  503
  534
  566
  599
  635
  672
  711
  752
  794
  840
  887
  937
  989
  1,043
  1,101
  1,161
  1,225
  1,292
  1,361
Earnings before tax, $m
  2,908
  2,824
  2,979
  3,143
  3,315
  3,496
  3,686
  3,885
  4,095
  4,315
  4,546
  5,245
  5,500
  5,768
  6,050
  6,345
  6,656
  6,982
  7,325
  7,684
  8,062
  8,459
  8,875
  9,313
  9,772
  10,255
  10,761
  11,293
  11,852
  12,438
  13,054
Tax expense, $m
  873
  762
  804
  849
  895
  944
  995
  1,049
  1,106
  1,165
  1,227
  1,416
  1,485
  1,557
  1,633
  1,713
  1,797
  1,885
  1,978
  2,075
  2,177
  2,284
  2,396
  2,514
  2,638
  2,769
  2,906
  3,049
  3,200
  3,358
  3,525
Net income, $m
  2,035
  2,061
  2,175
  2,294
  2,420
  2,552
  2,691
  2,836
  2,989
  3,150
  3,319
  3,829
  4,015
  4,211
  4,416
  4,632
  4,859
  5,097
  5,347
  5,610
  5,885
  6,175
  6,479
  6,798
  7,134
  7,486
  7,856
  8,244
  8,652
  9,080
  9,529

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2,472
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  15,201
  13,357
  14,013
  14,702
  15,427
  16,188
  16,988
  17,828
  18,711
  19,638
  20,613
  21,636
  22,711
  23,840
  25,026
  26,272
  27,580
  28,954
  30,397
  31,912
  33,503
  35,174
  36,929
  38,772
  40,707
  42,739
  44,873
  47,114
  49,467
  51,938
  54,532
Adjusted assets (=assets-cash), $m
  12,729
  13,357
  14,013
  14,702
  15,427
  16,188
  16,988
  17,828
  18,711
  19,638
  20,613
  21,636
  22,711
  23,840
  25,026
  26,272
  27,580
  28,954
  30,397
  31,912
  33,503
  35,174
  36,929
  38,772
  40,707
  42,739
  44,873
  47,114
  49,467
  51,938
  54,532
Revenue / Adjusted assets
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
Average production assets, $m
  3,126
  3,281
  3,442
  3,611
  3,789
  3,976
  4,173
  4,379
  4,596
  4,824
  5,063
  5,315
  5,579
  5,856
  6,147
  6,453
  6,775
  7,112
  7,467
  7,839
  8,230
  8,640
  9,071
  9,524
  9,999
  10,498
  11,023
  11,573
  12,151
  12,758
  13,395
Working capital, $m
  3,363
  1,612
  1,691
  1,774
  1,862
  1,954
  2,050
  2,152
  2,258
  2,370
  2,488
  2,611
  2,741
  2,877
  3,020
  3,171
  3,328
  3,494
  3,668
  3,851
  4,043
  4,245
  4,457
  4,679
  4,913
  5,158
  5,415
  5,686
  5,970
  6,268
  6,581
Total debt, $m
  7,829
  7,688
  8,218
  8,776
  9,362
  9,978
  10,625
  11,305
  12,019
  12,769
  13,558
  14,386
  15,255
  16,169
  17,128
  18,136
  19,194
  20,306
  21,473
  22,699
  23,986
  25,338
  26,758
  28,249
  29,814
  31,458
  33,184
  34,997
  36,901
  38,900
  40,999
Total liabilities, $m
  10,947
  10,806
  11,336
  11,894
  12,480
  13,096
  13,743
  14,423
  15,137
  15,887
  16,676
  17,504
  18,373
  19,287
  20,246
  21,254
  22,312
  23,424
  24,591
  25,817
  27,104
  28,456
  29,876
  31,367
  32,932
  34,576
  36,302
  38,115
  40,019
  42,018
  44,117
Total equity, $m
  4,254
  2,551
  2,676
  2,808
  2,946
  3,092
  3,245
  3,405
  3,574
  3,751
  3,937
  4,132
  4,338
  4,553
  4,780
  5,018
  5,268
  5,530
  5,806
  6,095
  6,399
  6,718
  7,053
  7,405
  7,775
  8,163
  8,571
  8,999
  9,448
  9,920
  10,416
Total liabilities and equity, $m
  15,201
  13,357
  14,012
  14,702
  15,426
  16,188
  16,988
  17,828
  18,711
  19,638
  20,613
  21,636
  22,711
  23,840
  25,026
  26,272
  27,580
  28,954
  30,397
  31,912
  33,503
  35,174
  36,929
  38,772
  40,707
  42,739
  44,873
  47,114
  49,467
  51,938
  54,533
Debt-to-equity ratio
  1.840
  3.010
  3.070
  3.130
  3.180
  3.230
  3.270
  3.320
  3.360
  3.400
  3.440
  3.480
  3.520
  3.550
  3.580
  3.610
  3.640
  3.670
  3.700
  3.720
  3.750
  3.770
  3.790
  3.810
  3.830
  3.850
  3.870
  3.890
  3.910
  3.920
  3.940
Adjusted equity ratio
  0.140
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,035
  2,061
  2,175
  2,294
  2,420
  2,552
  2,691
  2,836
  2,989
  3,150
  3,319
  3,829
  4,015
  4,211
  4,416
  4,632
  4,859
  5,097
  5,347
  5,610
  5,885
  6,175
  6,479
  6,798
  7,134
  7,486
  7,856
  8,244
  8,652
  9,080
  9,529
Depreciation, amort., depletion, $m
  470
  658
  668
  679
  690
  701
  713
  726
  740
  754
  768
  328
  344
  361
  379
  398
  418
  439
  461
  484
  508
  533
  560
  588
  617
  648
  680
  714
  750
  788
  827
Funds from operations, $m
  2,339
  2,720
  2,843
  2,973
  3,110
  3,253
  3,404
  3,562
  3,729
  3,903
  4,087
  4,157
  4,359
  4,572
  4,796
  5,031
  5,277
  5,536
  5,808
  6,093
  6,393
  6,708
  7,039
  7,386
  7,751
  8,134
  8,536
  8,958
  9,402
  9,867
  10,356
Change in working capital, $m
  37
  75
  79
  83
  87
  92
  97
  101
  107
  112
  118
  124
  130
  136
  143
  150
  158
  166
  174
  183
  192
  202
  212
  222
  234
  245
  258
  270
  284
  298
  313
Cash from operations, $m
  2,302
  2,644
  2,764
  2,890
  3,022
  3,161
  3,307
  3,461
  3,622
  3,792
  3,969
  4,033
  4,230
  4,436
  4,653
  4,880
  5,119
  5,370
  5,634
  5,911
  6,201
  6,507
  6,827
  7,164
  7,517
  7,889
  8,279
  8,688
  9,118
  9,569
  10,043
Maintenance CAPEX, $m
  0
  -193
  -203
  -212
  -223
  -234
  -245
  -258
  -270
  -284
  -298
  -313
  -328
  -344
  -361
  -379
  -398
  -418
  -439
  -461
  -484
  -508
  -533
  -560
  -588
  -617
  -648
  -680
  -714
  -750
  -788
New CAPEX, $m
  -273
  -155
  -161
  -169
  -178
  -187
  -196
  -206
  -217
  -228
  -239
  -251
  -264
  -277
  -291
  -306
  -321
  -337
  -354
  -372
  -391
  -410
  -431
  -453
  -475
  -499
  -524
  -550
  -578
  -607
  -637
Cash from investing activities, $m
  -532
  -348
  -364
  -381
  -401
  -421
  -441
  -464
  -487
  -512
  -537
  -564
  -592
  -621
  -652
  -685
  -719
  -755
  -793
  -833
  -875
  -918
  -964
  -1,013
  -1,063
  -1,116
  -1,172
  -1,230
  -1,292
  -1,357
  -1,425
Free cash flow, $m
  1,770
  2,297
  2,400
  2,508
  2,621
  2,740
  2,865
  2,997
  3,135
  3,280
  3,432
  3,469
  3,638
  3,814
  4,000
  4,195
  4,399
  4,614
  4,840
  5,077
  5,327
  5,588
  5,863
  6,151
  6,454
  6,772
  7,106
  7,457
  7,825
  8,212
  8,618
Issuance/(repayment) of debt, $m
  465
  511
  531
  558
  586
  616
  647
  680
  714
  750
  788
  828
  870
  913
  959
  1,008
  1,058
  1,111
  1,167
  1,226
  1,287
  1,352
  1,420
  1,491
  1,566
  1,644
  1,726
  1,813
  1,904
  1,999
  2,099
Issuance/(repurchase) of shares, $m
  -1,916
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -1,434
  511
  531
  558
  586
  616
  647
  680
  714
  750
  788
  828
  870
  913
  959
  1,008
  1,058
  1,111
  1,167
  1,226
  1,287
  1,352
  1,420
  1,491
  1,566
  1,644
  1,726
  1,813
  1,904
  1,999
  2,099
Total cash flow (excl. dividends), $m
  203
  2,807
  2,931
  3,066
  3,207
  3,356
  3,512
  3,677
  3,849
  4,030
  4,221
  4,297
  4,507
  4,728
  4,959
  5,202
  5,458
  5,726
  6,008
  6,303
  6,614
  6,940
  7,282
  7,642
  8,020
  8,416
  8,833
  9,270
  9,729
  10,211
  10,717
Retained Cash Flow (-), $m
  970
  -117
  -125
  -132
  -138
  -145
  -153
  -161
  -169
  -177
  -186
  -195
  -205
  -216
  -227
  -238
  -250
  -262
  -276
  -289
  -304
  -319
  -335
  -352
  -370
  -388
  -408
  -428
  -449
  -472
  -496
Prev. year cash balance distribution, $m
 
  1,820
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  4,510
  2,806
  2,934
  3,069
  3,211
  3,360
  3,516
  3,681
  3,853
  4,035
  4,102
  4,302
  4,512
  4,733
  4,965
  5,208
  5,464
  5,732
  6,014
  6,310
  6,621
  6,947
  7,290
  7,650
  8,028
  8,425
  8,842
  9,280
  9,739
  10,222
Discount rate, %
 
  6.00
  6.30
  6.62
  6.95
  7.29
  7.66
  8.04
  8.44
  8.86
  9.31
  9.77
  10.26
  10.78
  11.31
  11.88
  12.47
  13.10
  13.75
  14.44
  15.16
  15.92
  16.72
  17.55
  18.43
  19.35
  20.32
  21.33
  22.40
  23.52
  24.70
PV of cash for distribution, $m
 
  4,255
  2,483
  2,421
  2,346
  2,258
  2,158
  2,046
  1,924
  1,794
  1,657
  1,471
  1,332
  1,193
  1,055
  922
  794
  674
  564
  464
  375
  298
  232
  177
  132
  96
  69
  48
  32
  21
  14
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Illinois Tool Works Inc. is a manufacturer of industrial products and equipment. The Company operates through seven segments. The Automotive OEM segment produces components and fasteners for automotive-related applications. The Food Equipment segment offers commercial food equipment. The Test & Measurement and Electronics segment produces test and measurement, and electronic manufacturing and maintenance, repair and operations (MRO) solutions. The Welding segment produces welding equipment, consumables and accessories for industrial and commercial applications. The Polymers & Fluids segment produces adhesives, sealants, lubrication and cutting fluids, and fluids and polymers for auto aftermarket maintenance and appearance. The Construction Products segment supplies engineered fastening systems and solutions. The Specialty Products segment produces beverage packaging equipment and consumables, product coding and marking equipment and consumables, and appliance components and fasteners.

FINANCIAL RATIOS  of  Illinois Tool Works (ITW)

Valuation Ratios
P/E Ratio 24.8
Price to Sales 3.7
Price to Book 11.9
Price to Tangible Book
Price to Cash Flow 21.9
Price to Free Cash Flow 24.9
Growth Rates
Sales Growth Rate 1.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -3.9%
Cap. Spend. - 3 Yr. Gr. Rate -5.8%
Financial Strength
Quick Ratio 4
Current Ratio 0
LT Debt to Equity 168.7%
Total Debt to Equity 184%
Interest Coverage 15
Management Effectiveness
Return On Assets 14.1%
Ret/ On Assets - 3 Yr. Avg. 14.3%
Return On Total Capital 16.5%
Ret/ On T. Cap. - 3 Yr. Avg. 16.7%
Return On Equity 42.9%
Return On Equity - 3 Yr. Avg. 36.7%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 41.9%
Gross Margin - 3 Yr. Avg. 41.1%
EBITDA Margin 26.4%
EBITDA Margin - 3 Yr. Avg. 25.2%
Operating Margin 22.5%
Oper. Margin - 3 Yr. Avg. 21.3%
Pre-Tax Margin 21.4%
Pre-Tax Margin - 3 Yr. Avg. 20.1%
Net Profit Margin 15%
Net Profit Margin - 3 Yr. Avg. 16.5%
Effective Tax Rate 30%
Eff/ Tax Rate - 3 Yr. Avg. 30.1%
Payout Ratio 40.3%

ITW stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ITW stock intrinsic value calculation we used $13599 million for the last fiscal year's total revenue generated by Illinois Tool Works. The default revenue input number comes from 2016 income statement of Illinois Tool Works. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ITW stock valuation model: a) initial revenue growth rate of 4.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6%, whose default value for ITW is calculated based on our internal credit rating of Illinois Tool Works, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Illinois Tool Works.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ITW stock the variable cost ratio is equal to 78.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for ITW stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Illinois Tool Works.

Corporate tax rate of 27% is the nominal tax rate for Illinois Tool Works. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ITW stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ITW are equal to 23%.

Life of production assets of 16.2 years is the average useful life of capital assets used in Illinois Tool Works operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ITW is equal to 11.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $4254 million for Illinois Tool Works - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 346.539 million for Illinois Tool Works is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Illinois Tool Works at the current share price and the inputted number of shares is $50.5 billion.

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COMPANY NEWS

▶ How Safe Is Illinois Tool Works' Dividend?   [Sep-09-17 04:31PM  Motley Fool]
▶ ITW to Present at Morgan Stanley Laguna Conference   [Aug-22-17 08:00AM  GlobeNewswire]
▶ The Market In 5 Minutes   [Aug-17-17 08:33AM  Benzinga]
▶ 3M Company Seeks Growth, But at What Price?   [Aug-11-17 08:05AM  Motley Fool]
▶ ITW Increases Quarterly Dividend 20%   [Aug-04-17 02:26PM  GlobeNewswire]
▶ Maker of Rain-X, other auto products opens new HQ in Houston   [Jul-25-17 05:07PM  American City Business Journals]
▶ Illinois Tool Works tops 2Q profit forecasts   [Jul-24-17 11:11PM  Associated Press]
▶ ITW Reports Second-Quarter 2017 Results   [08:00AM  GlobeNewswire]
▶ ITW Schedules Second Quarter 2017 Earnings Conference Call   [Jun-26-17 08:00AM  GlobeNewswire]
▶ 5 Companies Reach 52-Week Highs   [Jun-21-17 01:14PM  GuruFocus.com]
▶ Breakout Watch: 2016 IPO Stock Tests New Buy Zone   [Jun-19-17 01:37PM  Investor's Business Daily]
▶ Seven iQ100 members hit all-time highs   [Jun-14-17 03:48PM  CNBC Videos]
▶ Two iQ100 members hitting 52-week highs   [Jun-12-17 04:50PM  CNBC Videos]
▶ Nine members of iQ100 hit all time highs   [03:14PM  CNBC Videos]
▶ Is it a Good Time To Buy 3M Co Stock?   [09:23AM  Motley Fool]
▶ UnitedHealth, ITW, Northrop Grumman Look Rocket-Ready   [May-22-17 12:12PM  TheStreet.com]
▶ If You Like Dividends, You Should Love These 4 Stocks   [May-10-17 08:45AM  Motley Fool]
▶ 4 Key Takeaways From Illinois Tool Works' Earnings   [May-08-17 12:19PM  Motley Fool]
▶ ITW to Present at Upcoming Investor Events   [08:00AM  GlobeNewswire]
▶ ITW Board of Directors Declares Quarterly Dividend   [May-05-17 12:43PM  GlobeNewswire]
▶ Illinois Tool Works Easily Beats Guidance   [03:34PM  Motley Fool]
▶ Company News for April 25, 2017   [09:40AM  Zacks]
▶ Illinois Tool Works Is Still Pointed Higher   [09:31AM  TheStreet.com]
▶ Illinois Tool Works: Cramer's Top Takeaways   [06:26AM  TheStreet.com]
▶ French Presidential Election In Focus   [Apr-24-17 10:56AM  Zacks]
▶ Illinois Tool Works tops Street 1Q forecasts   [08:06AM  Associated Press]
▶ ITW Reports First-Quarter 2017 Results   [08:00AM  GlobeNewswire]
▶ 3 Stocks You Don't Have to Babysit   [Apr-21-17 10:35AM  Motley Fool]
▶ 3 of the Safest Stocks You Can Buy Right Now   [Apr-04-17 09:38AM  Motley Fool]
▶ 3 Stocks to Help Fund Your Retirement   [Apr-02-17 09:42AM  Motley Fool]
▶ Illinois Tool Works Stock Trades Ex-Dividend Wednesday   [Mar-28-17 09:00AM  Investopedia]
▶ ITW Schedules First Quarter 2017 Earnings Conference Call   [Mar-27-17 08:00AM  GlobeNewswire]
▶ Better Buy: Caterpillar Inc. vs. Illinois Tool Works   [Mar-24-17 11:09AM  Motley Fool]
▶ [$$] Welbilt Cooks Up a Winning Strategy   [Mar-18-17 01:22AM  at Barrons.com]
Financial statements of ITW
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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