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Will Illinois Tool (ITW) Keep Its Earnings Streak Alive in Q1?

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Illinois Tool Works Inc. (ITW - Free Report) is scheduled to release first-quarter 2021 results on Apr 30, before market open.

The industrial manufacturing company reported impressive results in the last four quarters, the earnings surprise being 26.16%, on average. In the last reported quarter, its earnings of $2.11 surpassed the Zacks Consensus Estimate of $1.77 by 19.21%.

In the past three months, shares of Illinois Tool have gained 18.1% compared with the industry’s growth of 18.7%.




 

Let us delve deeper.

Key Factors & Estimates for Q1

Solid product offerings, exposure in diverse end-markets and a healthy liquidity position aided Illinois Tool’s performance in the last reported quarter. The same trend is expected to have continued in first-quarter 2021. Also, the positive impacts of its enterprise strategy — including Business Structure Simplification, Portfolio Management and Strategic Sourcing — are anticipated to get reflected on margin results. Notably, enterprise strategy boosted operating margin by 130 basis points in the fourth quarter of 2020.

Cost-saving actions and supply-chain management are anticipated to have boosted the first-quarter performance. In addition to the aforementioned factors, the recovery in manufacturing activities in the country is expected to have aided demand. Notably, industrial production in the U.S. expanded 2.5% annually in the first quarter of 2021. Further, the ISM Purchasing Manager’s Index exhibited improvement from 60.5% at the end of December to 64.7% at the end of March 2021.

However, the persistence of the pandemic-related uncertainties is anticipated to have hurt the company’s performance in some markets. Also, the adverse impacts of product-line simplification initiatives are expected to get reflected in the results.

The Zack Consensus Estimate for the company’s first-quarter earnings is pegged at $1.88 per share, indicating growth of 6.2% from the year-ago reported figure and a 10.9% dip sequentially.

Also, the consensus estimate for revenues of $3,416 million suggests a 5.8% increase from the year-ago quarter’s reported number and a 1.7% decline from the last reported quarter’s figure.

Earnings Whispers

Our proven model conclusively predicts an earnings beat for Illinois Tool this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case with Illinois Tool as is shown below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Illinois Tool has an Earnings ESP of +0.56%, with the Most Accurate Estimate of $1.90 above the Zacks Consensus Estimate of $1.88.

Illinois Tool Works Inc. Price, Consensus and EPS Surprise

 

Illinois Tool Works Inc. Price, Consensus and EPS Surprise

Illinois Tool Works Inc. price-consensus-eps-surprise-chart | Illinois Tool Works Inc. Quote

Zacks Rank: The company currently carries a Zacks Rank #3.

Other Stocks to Consider

Here are some other companies in the industry that you may want to consider as according to our model these too have the right combination of elements to post an earnings beat this quarter.

Colfax Corporation (CFX - Free Report) has an Earnings ESP of +0.68% and it presently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Parker-Hannifin Corporation (PH - Free Report) currently has an Earnings ESP of +1.04% and a Zacks Rank #3.

The Middleby Corporation (MIDD - Free Report) presently has an Earnings ESP of +0.21% and a Zacks Rank #2.

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