Illinois Tool Works Inc. (ITW - Free Report) seems to have lost its sheen due to weakness in auto production, high debts, forex woes and other company-specific headwinds.
The manufacturer of highly engineered products and specialty systems currently carries a Zacks Rank #4 (Sell).
The company belongs to the Zacks Manufacturing – General Industrial industry, which is at the bottom 25% (with the rank of 191) of more than 250 Zacks industries. We believe that the industry is suffering from adverse impacts of global uncertainties, unfavorable movements in foreign currencies, weakness in industrial production in the United States, and cost escalation due to tariffs, commodity inflation, high labor costs and freight charges.
It is worth noting that Illinois Tool’s second-quarter 2019 results were better than expected, with earnings surpassing estimates by 1.5%. However, the bottom line suffered from weak revenues, high restructuring expenses, forex woes and divestiture-related loss.
A glance at the company’s price trend in the past six months shows that it has lost nearly 4% compared with the industry and S&P 500’s declines of 5.8% and 0.3%, respectively.
Its earnings estimates were lowered, reflecting bearish sentiments. Over the past 90 days, the Zacks Consensus Estimate for Illinois Tool’s earnings has declined 3% to $7.64 for 2019 and has moved down 3.5% to $8.10 for 2020.
Illinois Tool Works Inc. Price and Consensus