Illinois Tool Works - AI Stock Analysis

Analysis generated January 24, 2026

Illinois Tool Works Inc. (ITW) is a global manufacturer that produces a diverse array of industrial products and equipment. The company operates through a highly decentralized business model that prioritizes customer-focused innovation and strong margins. This model encompasses seven distinct business segments, ensuring a diversified revenue stream and minimized risk exposure.

Fundamental Analysis

In the last quarter, ITW reported revenues of $4.06 billion. This represents a 0.15% increase compared to the previous quarter, indicating steady growth. Moreover, year-over-year revenue grew by 2.34%, reinforcing a positive long-term growth trajectory. These numbers underscore ITW's robust market presence and ability to generate consistent revenue.

Net income for the last quarter stood at $821 million, reflecting an increase of 8.74% from the prior quarter. However, year-over-year net income experienced a sharp decline of 29.22%. This decline may raise questions about ITW's operational efficiency and profitability in the current market environment.

The EBITDA for the last quarter was $1.22 billion, showing a 4.53% increase compared to the previous quarter. Despite this positive trend, the year-over-year EBITDA fell by 20.26%, signaling potential challenges in managing operating expenses or achieving economies of scale.

The current Price-to-Earnings (P/E) ratio of 25.19 could be seen as relatively high, potentially indicating that the stock is overvalued. This high valuation could foster a bearish outlook among investors, especially in light of the recent decline in net income and EBITDA.

Technical Analysis

As of today, ITW's stock price sits at $258.26. Over the past month, the stock has appreciated by 3.18%, suggesting a positive short-term trend. Year-over-year, the stock price has increased by 1.86%, indicating a generally positive long-term trend. However, the overall trend appears bearish.

The current 10-day Simple Moving Average (SMA10) is 260.64, slightly lower than the previous SMA10 of 260.70. This decrease might suggest a potential downward trend in price movement. Additionally, the Relative Strength Index (RSI) is at 40.8, indicating that the stock is in a neutral condition and neither overbought nor oversold.

Alternative Data Analysis

From an alternative data perspective, ITW has 221 open positions, a 17% decrease in the last couple of months. This reduction may indicate efforts to cut costs or improve margins, rather than expansion, which might not be favorable for growth expectations.

Employee sentiment about ITW's business outlook is neutral, suggesting neither a strong positive nor negative internal perspective regarding the company's future. On the customer acquisition front, ITW's website has seen a 42% increase in visitors in recent months, an encouraging sign that could translate to higher revenues.

In terms of customer engagement, ITW's Instagram followers have grown by 4% to a total of 2,500. This moderate increase in social media presence reflects a rising interest in the company. Moreover, AltIndex’s AI score of 69 for ITW signals a positive outlook and suggests the stock may be a buy at its current levels.

Conclusion and Recommendation

Illinois Tool Works Inc. presents a mixed picture. While the company demonstrates steady revenue growth and a modest increase in short-term stock price, the declines in year-over-year net income and EBITDA raise some concerns. From a technical standpoint, the stock is currently in a neutral RSI condition and indicates a potential bearish trend based on its SMA10.

On the alternative data front, although the reduction in open job positions may seem negative, the significant increase in website visitors and growing social media engagement are positive indicators. Coupled with an AI score of 69 from AltIndex, which suggests a buy signal, the overall sentiment leans slightly positive for ITW.

Given these factors, a balanced recommendation would be to consider buying ITW stock, while closely monitoring its financial performance and market trends for any potential shifts in its growth trajectory.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.