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Here's Why Investors Should Invest in ITT Stock Right Now
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ITT Inc. (ITT - Free Report) is gaining from strong momentum in the end markets like industrial, aerospace and defense. Higher sales volume and robust order growth are also driving the company’s performance.
Let’s delve into the factors that make this Zacks Rank #2 (Buy) company a smart investment choice at the moment.
Segmental Strength: Strength in the aftermarket business, driven by robust energy and mining markets, is aiding the Industrial Process (IP) segment. Increasing demand in the chemical and energy markets also bodes well for the segment. Growth in component sales within the aerospace and defense markets is driving the Connect and Control Technologies segment. Solid momentum in the friction original equipment business is driving growth for the Motion Technologies segment.
Acquisition Benefits: ITT has been strengthening its business through acquisitions. The company inked a deal in November 2023 to acquire the privately held Svanehøj Group A/S (Svanehøj) for approximately $395 million. The transaction is expected to close in the first quarter of 2024, subject to the completion of customary regulatory approvals. When acquired, Svanehøj will become part of ITT’s IP segment, focusing on highly engineered pumps, valves and aftermarket services.
The acquisition of Micro-Mode Products, Inc. in May 2023 enhanced ITT's product portfolio and customer base, specifically for long-term defense programs. The addition of Micro-Mode grew ITT's existing North American connectors platform, which is part of its CCT segment.
Innovation Initiatives: ITT has been investing in product innovation across its friction technologies, connectors and pump businesses for a while. For instance, in June 2023, the company made an initial investment of €50 million ($54.49 million) to expand a Friction manufacturing facility in Termoli, Italy, and to enhance the research and development competence in Barge, Italy. With this investment, ITT is likely to boost its position in the brake pad market for luxury and sporting vehicles.
Business Strength: ITT is likely to benefit from its focus on fulfilling customers’ needs, operational execution, and innovation and growth investments. In the third quarter, the company’s organic orders grew 2% year over year, driven by strong demand in IP’s aftermarket business. For 2023, the company’s organic sales are expected to grow approximately 7-8% year over year. In the long run, a robust backlog in its businesses, supported by the recovery in the energy end market, is expected to boost ITT’s performance.
Rewards to Shareholders: ITT is committed to handsomely rewarding its shareholders through share buybacks and dividend payments. In the first nine months of 2023, dividend payments totaled $71.9 million and share repurchases were $60 million. The quarterly dividend rate was hiked by 10% in February 2023.
Northbound Estimate Revisions: In the past 60 days, the Zacks Consensus Estimate for ITT’s 2023 earnings has been revised 2% upward.
Price Performance: Shares of ITT gained 38.5% in a year against the industry‘s 6.7% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked companies have been discussed below.
FSS delivered a trailing four-quarter average earnings surprise of 8.1%. In the past 60 days, the Zacks Consensus Estimate for Federal Signal’s 2023 earnings has increased 3.3%. The stock has risen 50.2% in the past year.
General Electric Company (GE - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 8%.
The consensus estimate for General Electric’s 2023 earnings has increased 53.4% in the past 60 days. Shares of GE have jumped 42.5% in the past year.
A. O. Smith Corporation (AOS - Free Report) currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 14%.
In the past 60 days, the consensus estimate for A. O. Smith’s 2023 earnings has improved 5%. The stock has risen 29.9% in the past year.
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Here's Why Investors Should Invest in ITT Stock Right Now
ITT Inc. (ITT - Free Report) is gaining from strong momentum in the end markets like industrial, aerospace and defense. Higher sales volume and robust order growth are also driving the company’s performance.
Let’s delve into the factors that make this Zacks Rank #2 (Buy) company a smart investment choice at the moment.
Segmental Strength: Strength in the aftermarket business, driven by robust energy and mining markets, is aiding the Industrial Process (IP) segment. Increasing demand in the chemical and energy markets also bodes well for the segment. Growth in component sales within the aerospace and defense markets is driving the Connect and Control Technologies segment. Solid momentum in the friction original equipment business is driving growth for the Motion Technologies segment.
Acquisition Benefits: ITT has been strengthening its business through acquisitions. The company inked a deal in November 2023 to acquire the privately held Svanehøj Group A/S (Svanehøj) for approximately $395 million. The transaction is expected to close in the first quarter of 2024, subject to the completion of customary regulatory approvals. When acquired, Svanehøj will become part of ITT’s IP segment, focusing on highly engineered pumps, valves and aftermarket services.
The acquisition of Micro-Mode Products, Inc. in May 2023 enhanced ITT's product portfolio and customer base, specifically for long-term defense programs. The addition of Micro-Mode grew ITT's existing North American connectors platform, which is part of its CCT segment.
Innovation Initiatives: ITT has been investing in product innovation across its friction technologies, connectors and pump businesses for a while. For instance, in June 2023, the company made an initial investment of €50 million ($54.49 million) to expand a Friction manufacturing facility in Termoli, Italy, and to enhance the research and development competence in Barge, Italy. With this investment, ITT is likely to boost its position in the brake pad market for luxury and sporting vehicles.
Business Strength: ITT is likely to benefit from its focus on fulfilling customers’ needs, operational execution, and innovation and growth investments. In the third quarter, the company’s organic orders grew 2% year over year, driven by strong demand in IP’s aftermarket business. For 2023, the company’s organic sales are expected to grow approximately 7-8% year over year. In the long run, a robust backlog in its businesses, supported by the recovery in the energy end market, is expected to boost ITT’s performance.
Rewards to Shareholders: ITT is committed to handsomely rewarding its shareholders through share buybacks and dividend payments. In the first nine months of 2023, dividend payments totaled $71.9 million and share repurchases were $60 million. The quarterly dividend rate was hiked by 10% in February 2023.
Northbound Estimate Revisions: In the past 60 days, the Zacks Consensus Estimate for ITT’s 2023 earnings has been revised 2% upward.
Price Performance: Shares of ITT gained 38.5% in a year against the industry‘s 6.7% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked companies have been discussed below.
Federal Signal Corporation (FSS - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
FSS delivered a trailing four-quarter average earnings surprise of 8.1%. In the past 60 days, the Zacks Consensus Estimate for Federal Signal’s 2023 earnings has increased 3.3%. The stock has risen 50.2% in the past year.
General Electric Company (GE - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 8%.
The consensus estimate for General Electric’s 2023 earnings has increased 53.4% in the past 60 days. Shares of GE have jumped 42.5% in the past year.
A. O. Smith Corporation (AOS - Free Report) currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 14%.
In the past 60 days, the consensus estimate for A. O. Smith’s 2023 earnings has improved 5%. The stock has risen 29.9% in the past year.