Industrial tool maker Illinois Tool Works Inc. (ITW - Free Report) hosted its Investors Day 2017 on Dec 1. The company focused on its long-term growth targets and also initiated forecast for 2018. A brief discussion on the event has been provided below.
For the five years from 2018 to 2022, the company anticipates to gain from its solid product portfolio and growth strategies. From 2018 and beyond, it expects organic revenue growth to be in the 3-5% range, operating margin to be in excess of 25%, incremental margin to be 35% and earnings per share to grow 8-10% in each year. Also, after-tax return on invested capital is projected to be above 20%. Free cash flow will likely be more than 100% of net income. By 2020, the company anticipates distributing 50% of its free cash flow, up from the current distribution rate of 43%.
In addition, Illinois Tool Works initiated its financial guidance for 2018. The company anticipates GAAP earnings to be within $7.05-$7.25 per share. Organic revenue growth is predicted to be within 3-4% and operating margin to be 25-25.5%. The projections for 2017 have been reaffirmed, with earnings per share still anticipated to be $6.62-$6.72, reflecting growth of 17% at mid-point from the previous year.
In the last three months, the company’s shares have yielded 20.8% return, outperforming 13.5% rally recorded by the industry it belongs to. We believe that better-than-expected third-quarter results, with an earnings beat of 3.64%, primarily drove the company’s share price.
Also, stock’s earnings estimates for 2017 have been revised upward by five brokerage firms while estimates for 2018 have been raised by five firms and lowered by one in the last 60 days. Currently, the Zacks Consensus Estimate is pegged at $6.69 for 2017 and $7.14 for 2018, reflecting growth of 3.1% and 0.7% from their respective 60-day ago tallies.
Illinois Tool Works Inc. Price and Consensus
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Industrial tool maker Illinois Tool Works Inc. (ITW - Free Report) hosted its Investors Day 2017 on Dec 1. The company focused on its long-term growth targets and also initiated forecast for 2018. A brief discussion on the event has been provided below.
For the five years from 2018 to 2022, the company anticipates to gain from its solid product portfolio and growth strategies. From 2018 and beyond, it expects organic revenue growth to be in the 3-5% range, operating margin to be in excess of 25%, incremental margin to be 35% and earnings per share to grow 8-10% in each year. Also, after-tax return on invested capital is projected to be above 20%. Free cash flow will likely be more than 100% of net income. By 2020, the company anticipates distributing 50% of its free cash flow, up from the current distribution rate of 43%.
In addition, Illinois Tool Works initiated its financial guidance for 2018. The company anticipates GAAP earnings to be within $7.05-$7.25 per share. Organic revenue growth is predicted to be within 3-4% and operating margin to be 25-25.5%. The projections for 2017 have been reaffirmed, with earnings per share still anticipated to be $6.62-$6.72, reflecting growth of 17% at mid-point from the previous year.
In the last three months, the company’s shares have yielded 20.8% return, outperforming 13.5% rally recorded by the industry it belongs to. We believe that better-than-expected third-quarter results, with an earnings beat of 3.64%, primarily drove the company’s share price.
Also, stock’s earnings estimates for 2017 have been revised upward by five brokerage firms while estimates for 2018 have been raised by five firms and lowered by one in the last 60 days. Currently, the Zacks Consensus Estimate is pegged at $6.69 for 2017 and $7.14 for 2018, reflecting growth of 3.1% and 0.7% from their respective 60-day ago tallies.
Illinois Tool Works Inc. Price and Consensus
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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