Illinois Tool Works (NYSE:ITW) Announces Quarterly Earnings Results, Beats Estimates By $0.03 EPS

Illinois Tool Works (NYSE:ITW) posted its quarterly earnings results on Tuesday. The industrial products company reported $2.72 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $2.69 by $0.03, Briefing.com reports. The company had revenue of $4.09 billion during the quarter, compared to analyst estimates of $4.07 billion. Illinois Tool Works had a net margin of 19.05% and a return on equity of 93.26%. Illinois Tool Works’s revenue for the quarter was up 4.1% compared to the same quarter last year. During the same period last year, the firm posted $2.54 EPS. Illinois Tool Works updated its FY 2026 guidance to 11.000-11.400 EPS.

Here are the key takeaways from Illinois Tool Works’ conference call:

• ITW finished Q4 with a solid operational close—total revenue grew ~4.1% (organic 1.3%), GAAP EPS rose 7% to $2.72, and company-wide operating margins reached record levels with enterprise initiatives contributing roughly 140 basis points.
• Management emphasized progress on Customer-Backed Innovation (CBI), which contributed 2.4% of 2025 revenue, patent filings increased 9% in 2025 (after +18% in 2024), and the company is tracking toward a 3%+ CBI goal by 2030.
• 2026 guidance targets organic growth of 1–3% (total revenue 2–4%), a GAAP EPS range of $11.00–$11.40 (midpoint $11.20, +7%), ~100 bps of operating margin expansion, free cash flow conversion >100%, and planned share repurchases of about $1.5 billion.
• Some end‑market and regional weakness remains—Europe revenue declined ~2% in Q4 and Construction Products posted a 4% organic decline, with residential renovation notably soft.
• Margin gains are largely driven by enterprise initiatives and higher incremental margins (mid–high 40s) but will be partly offset by wage/benefit inflation and continued investments; M&A is described as opportunistic rather than a primary near‑term driver.

Illinois Tool Works Trading Up 5.3%

Shares of ITW stock opened at $278.17 on Wednesday. Illinois Tool Works has a 1-year low of $214.66 and a 1-year high of $282.88. The company has a market cap of $80.70 billion, a price-to-earnings ratio of 26.98, a PEG ratio of 14.15 and a beta of 1.15. The company has a debt-to-equity ratio of 2.39, a current ratio of 1.53 and a quick ratio of 1.11. The stock has a 50 day simple moving average of $254.35 and a 200-day simple moving average of $255.13.

Analysts Set New Price Targets

ITW has been the subject of a number of research reports. Weiss Ratings restated a “buy (b-)” rating on shares of Illinois Tool Works in a research report on Wednesday, January 28th. Bank of America raised Illinois Tool Works from an “underperform” rating to a “neutral” rating and boosted their price objective for the company from $220.00 to $255.00 in a report on Tuesday, November 18th. The Goldman Sachs Group reaffirmed a “sell” rating and set a $253.00 target price on shares of Illinois Tool Works in a report on Tuesday. Wolfe Research boosted their price target on Illinois Tool Works from $264.00 to $278.00 and gave the company an “underperform” rating in a report on Thursday, January 15th. Finally, Citigroup restated a “neutral” rating on shares of Illinois Tool Works in a research report on Wednesday. One investment analyst has rated the stock with a Buy rating, seven have given a Hold rating and five have issued a Sell rating to the stock. According to MarketBeat, the company has an average rating of “Reduce” and an average target price of $261.83.

Hedge Funds Weigh In On Illinois Tool Works

Several hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Osterweis Capital Management Inc. increased its stake in shares of Illinois Tool Works by 6,240.0% during the second quarter. Osterweis Capital Management Inc. now owns 317 shares of the industrial products company’s stock worth $78,000 after purchasing an additional 312 shares in the last quarter. Front Street Capital Management Inc. purchased a new stake in Illinois Tool Works during the 2nd quarter worth approximately $124,000. MUFG Securities EMEA plc acquired a new position in shares of Illinois Tool Works during the second quarter valued at approximately $195,000. Invenio Wealth Partners LLC purchased a new position in shares of Illinois Tool Works in the third quarter valued at approximately $201,000. Finally, Seven Mile Advisory acquired a new stake in shares of Illinois Tool Works in the third quarter worth approximately $219,000. 79.77% of the stock is owned by hedge funds and other institutional investors.

Key Stories Impacting Illinois Tool Works

Here are the key news stories impacting Illinois Tool Works this week:

• Positive Sentiment: Q4 earnings and revenue beat consensus (Q4 EPS $2.72 vs. $2.69 est.; Q4 revenue $4.09B vs. $4.07B), and GAAP FY‑2025 EPS of $10.49 topped prior guidance — a core driver of the stock rally. Illinois Tool Surpasses Q4 Earnings Estimates, Issues 2026 View
• Positive Sentiment: Operating margin expanded (Q4 operating margin 26.5%; enterprise initiatives added ~140 bps), signaling better profitability and supporting higher EPS leverage going forward. ITW Reports Fourth Quarter and Full Year 2025 Results
• Positive Sentiment: FY‑2026 guidance: EPS $11.00–$11.40 (midpoint implies ~7% growth vs. FY‑2025), revenue guidance $16.4–16.7B and ~100 bps operating margin expansion targeted — management is forecasting growth and margin tailwinds. ITW Reports Fourth Quarter and Full Year 2025 Results
• Positive Sentiment: Company reiterated buyback activity alongside guidance — buybacks plus margin expansion support EPS per share and are pro‑shareholder. Illinois Tool Surpasses Q4 Earnings Estimates, Issues 2026 View
• Positive Sentiment: Market reaction pushed ITW to a 52‑week high after the results, reflecting investor confidence in the beat + outlook combination. Illinois Tool Works Stock Smashes 52-Week High After Earnings Beat
• Neutral Sentiment: Revenue growth was modest: FY‑2025 revenue $16.0B (+0.9% y/y) and management guided organic growth of ~1–3% for 2026 — growth is steady but not breakout. ITW Reports Fourth Quarter and Full Year 2025 Results
• Neutral Sentiment: Management commentary and the full earnings call transcript provide detail on execution and segment trends for investors doing deeper due diligence. Illinois Tool Works Inc. (ITW) Q4 2025 Earnings Call Transcript
• Negative Sentiment: Although the EPS range implies growth, the guidance midpoint is only roughly in line with Street expectations (slightly below some consensus figures), leaving limited upside to estimates absent stronger organic demand. Illinois Tool Surpasses Q4 Earnings Estimates, Issues 2026 View

Illinois Tool Works Company Profile

Illinois Tool Works Inc (ITW) is a diversified industrial manufacturer that designs and produces a broad array of engineered products, consumables and related service solutions for industrial customers. Its offerings span engineered fastening systems, specialty components, industrial equipment, welding products, foodservice and packaging equipment, adhesives and polymer products, and test-and-measurement technologies. These products are used as critical inputs by customers across automotive, construction, electronics, foodservice, maintenance and other industrial end markets.

The company operates a decentralized business model in which independently managed businesses focus on niche product lines and close customer relationships.