Zacks Investment Research downgraded shares of Illinois Tool Works (NYSE:ITW) from a hold rating to a sell rating in a research note released on Tuesday.

According to Zacks, “In the past three months, shares of Illinois Tool Works have underperformed the industry. Inflation in raw material costs is concerning for the company. However, pricing actions are being taken to curb its impact. In second-quarter of 2018, price/costs had an adverse impact of 70 basis points on operating margin. For 2018, the company has lowered its operating margin guidance from 25-25.5% to 24-25% on account of margin dilution estimated from price/costs. Further, it decreased its earnings guidance from $7.60-$7.80 to $7.50-$7.70 per share range due to 12 cents of adverse forex impact predicted for the second half of the year. Moreover, weak cash positions and huge debt levels can be detrimental to the company's financials. In the past 60 days, earnings estimates on the stock decreased for both 2018 and 2019.”

Several other brokerages have also issued reports on ITW. ValuEngine upgraded shares of Illinois Tool Works from a sell rating to a hold rating in a research report on Friday, July 20th. Deutsche Bank set a $152.00 target price on shares of Illinois Tool Works and gave the company a hold rating in a research report on Thursday, July 12th. MED lowered shares of Illinois Tool Works from a buy rating to a hold rating and set a $152.00 target price on the stock. in a research report on Thursday, July 12th. Wolfe Research began coverage on shares of Illinois Tool Works in a research report on Wednesday, June 27th. They issued an underperform rating on the stock. Finally, Morgan Stanley began coverage on shares of Illinois Tool Works in a research report on Monday, August 20th. They issued an equal weight rating and a $146.00 target price on the stock. Two research analysts have rated the stock with a sell rating, twelve have assigned a hold rating and five have issued a buy rating to the company. Illinois Tool Works presently has a consensus rating of Hold and an average price target of $159.53.

ITW stock opened at $144.89 on Tuesday. The firm has a market cap of $47.51 billion, a P/E ratio of 21.99, a PEG ratio of 1.81 and a beta of 1.24. The company has a current ratio of 1.73, a quick ratio of 1.35 and a debt-to-equity ratio of 1.60. Illinois Tool Works has a one year low of $134.45 and a one year high of $179.07.

Illinois Tool Works (NYSE:ITW) last released its quarterly earnings results on Monday, July 23rd. The industrial products company reported $1.97 EPS for the quarter, meeting the Thomson Reuters’ consensus estimate of $1.97. Illinois Tool Works had a net margin of 12.70% and a return on equity of 56.74%. The company had revenue of $3.83 billion for the quarter, compared to analyst estimates of $3.85 billion. During the same quarter last year, the business earned $1.69 earnings per share. The firm’s revenue was up 6.4% on a year-over-year basis. research analysts predict that Illinois Tool Works will post 7.64 earnings per share for the current year.

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, October 9th. Stockholders of record on Friday, September 28th will be paid a $1.00 dividend. This is an increase from Illinois Tool Works’s previous quarterly dividend of $0.78. This represents a $4.00 annualized dividend and a dividend yield of 2.76%. The ex-dividend date of this dividend is Thursday, September 27th. Illinois Tool Works’s dividend payout ratio (DPR) is currently 47.34%.

Illinois Tool Works declared that its board has authorized a stock buyback program on Friday, August 3rd that allows the company to repurchase $3.00 billion in outstanding shares. This repurchase authorization allows the industrial products company to repurchase up to 6.4% of its shares through open market purchases. Shares repurchase programs are usually an indication that the company’s management believes its stock is undervalued.

In other Illinois Tool Works news, Director Richard H. Lenny purchased 1,778 shares of the firm’s stock in a transaction dated Friday, July 27th. The shares were purchased at an average cost of $140.85 per share, with a total value of $250,431.30. The acquisition was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Company insiders own 0.90% of the company’s stock.

Large investors have recently bought and sold shares of the company. State Treasurer State of Michigan lifted its stake in shares of Illinois Tool Works by 150.8% in the second quarter. State Treasurer State of Michigan now owns 226,997 shares of the industrial products company’s stock worth $31,448,000 after buying an additional 136,500 shares in the last quarter. Sumitomo Mitsui Trust Holdings Inc. lifted its stake in shares of Illinois Tool Works by 6.0% in the second quarter. Sumitomo Mitsui Trust Holdings Inc. now owns 995,437 shares of the industrial products company’s stock worth $137,908,000 after buying an additional 56,096 shares in the last quarter. Schwab Charles Investment Management Inc. lifted its stake in shares of Illinois Tool Works by 14.6% in the second quarter. Schwab Charles Investment Management Inc. now owns 1,328,136 shares of the industrial products company’s stock worth $184,000,000 after buying an additional 169,106 shares in the last quarter. FDx Advisors Inc. lifted its stake in shares of Illinois Tool Works by 35.3% in the second quarter. FDx Advisors Inc. now owns 10,410 shares of the industrial products company’s stock worth $1,442,000 after buying an additional 2,717 shares in the last quarter. Finally, Swiss National Bank lifted its stake in shares of Illinois Tool Works by 2.7% in the second quarter. Swiss National Bank now owns 1,016,206 shares of the industrial products company’s stock worth $140,785,000 after buying an additional 26,900 shares in the last quarter. 76.13% of the stock is currently owned by hedge funds and other institutional investors.

Illinois Tool Works Company Profile

Illinois Tool Works Inc manufactures and sells industrial products and equipment worldwide. It operates through seven segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products. The Automotive OEM segment offers plastic and metal components, fasteners, and assemblies for automobiles, light trucks, and other industrial uses.

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