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Illinois Tool (ITW) Up 22.3% in 6 Months: What's Driving It?
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Illinois Tool Works Inc. (ITW - Free Report) appears in good shape, with its shares having rallied 22.3% over the past six months compared with the industry’s 20% increase.
Catalysts Behind the Price Surge
Illinois Tool is benefitting from robust demand across most of its businesses. Strong organic growth in North America, Europe and China is boosting revenues in its Automotive OEM (Original Equipment Manufacturer) segment. The Food Equipment unit segment is gaining from growth across both North America and International operations.
The company’s Test & Measurement and Electronics segment is benefitting from continued strength in the semiconductor business. The Welding segment is being driven by robust equipment and consumables manufacturing operations and industrial business. Continued strength in industrial applications, construction and U.S. residential and commercial end-markets are supporting the growth of the Polymers & Fluids segment.
Image Source: Zacks Investment Research
The acquisitions made by Illinois Tool should continue to boost its top line. The MTS Systems Corporation’s test and simulation business buyout (December 2021) added value to ITW’s Test & Measurement and Electronics segment. The MTS buyout boosted its sales by 3% in the third quarter of 2022, year over year. For 2022, management predicts the MTS buyout to boost sales by 3%.
ITW utilizes its cash flow to reward its shareholders through dividend payouts and share-repurchase programs. The company paid out dividends of $1.22 per share to its shareholders, in third-quarter 2022, representing a 7% increase from the year-ago period’s level. Also, in the first nine months of 2022, Illinois Tool bought back shares of $500 million.
Zacks Rank & Stocks to Consider
ITW carries a Zacks Rank #3 (Hold) at present.
Some better-ranked companies from the Industrial Products sector are discussed below:
AIT’s earnings estimates have increased 4.6% for fiscal 2023 in the past 60 days. Shares of Applied Industrial have risen 32.1% in the past six months.
IDEX Corporation (IEX - Free Report) presently has a Zacks Rank #2 (Buy). IEX’s earnings surprise in the last four quarters was 5.7%, on average.
In the past 60 days, IDEX’s earnings estimates have increased 1.9% for 2022. The stock has rallied 23.7% in the past six months.
EnerSys (ENS - Free Report) delivered an average four-quarter earnings surprise of 2.1%. ENS presently carries a Zacks Rank of 2.
ENS’ earnings estimates have increased 0.6% for fiscal 2023 in the past 60 days. The stock has gained 19.5% in the past six months.
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Illinois Tool (ITW) Up 22.3% in 6 Months: What's Driving It?
Illinois Tool Works Inc. (ITW - Free Report) appears in good shape, with its shares having rallied 22.3% over the past six months compared with the industry’s 20% increase.
Catalysts Behind the Price Surge
Illinois Tool is benefitting from robust demand across most of its businesses. Strong organic growth in North America, Europe and China is boosting revenues in its Automotive OEM (Original Equipment Manufacturer) segment. The Food Equipment unit segment is gaining from growth across both North America and International operations.
The company’s Test & Measurement and Electronics segment is benefitting from continued strength in the semiconductor business. The Welding segment is being driven by robust equipment and consumables manufacturing operations and industrial business. Continued strength in industrial applications, construction and U.S. residential and commercial end-markets are supporting the growth of the Polymers & Fluids segment.
Image Source: Zacks Investment Research
The acquisitions made by Illinois Tool should continue to boost its top line. The MTS Systems Corporation’s test and simulation business buyout (December 2021) added value to ITW’s Test & Measurement and Electronics segment. The MTS buyout boosted its sales by 3% in the third quarter of 2022, year over year. For 2022, management predicts the MTS buyout to boost sales by 3%.
ITW utilizes its cash flow to reward its shareholders through dividend payouts and share-repurchase programs. The company paid out dividends of $1.22 per share to its shareholders, in third-quarter 2022, representing a 7% increase from the year-ago period’s level. Also, in the first nine months of 2022, Illinois Tool bought back shares of $500 million.
Zacks Rank & Stocks to Consider
ITW carries a Zacks Rank #3 (Hold) at present.
Some better-ranked companies from the Industrial Products sector are discussed below:
Applied Industrial Technologies, Inc. (AIT - Free Report) presently sports a Zacks Rank #1 (Strong Buy) and a trailing four-quarter earnings surprise of 24.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
AIT’s earnings estimates have increased 4.6% for fiscal 2023 in the past 60 days. Shares of Applied Industrial have risen 32.1% in the past six months.
IDEX Corporation (IEX - Free Report) presently has a Zacks Rank #2 (Buy). IEX’s earnings surprise in the last four quarters was 5.7%, on average.
In the past 60 days, IDEX’s earnings estimates have increased 1.9% for 2022. The stock has rallied 23.7% in the past six months.
EnerSys (ENS - Free Report) delivered an average four-quarter earnings surprise of 2.1%. ENS presently carries a Zacks Rank of 2.
ENS’ earnings estimates have increased 0.6% for fiscal 2023 in the past 60 days. The stock has gained 19.5% in the past six months.