Standpoint Research Starts Illinois Tool Works (ITW) at Accumulate
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Price: $277.16 -1.89%
Rating Summary:
3 Buy, 17 Hold, 6 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 0
Rating Summary:
3 Buy, 17 Hold, 6 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 0
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Standpoint Research initiates coverage on Illinois Tool Works (NYSE: ITW) with a Accumulate. PT $55.00.
The firm states, "ITW (cut this morning to under-perform at Bank of America) has dropped 25% since hitting an all-time high last month. This is one of the more stable and safe industrial names and most suited for those looking for a less risky cyclical name. ITW is diversified with more than 800 business units spread out across more than 50 countries around the world. ITW is trading at 12X trailing twelve months earnings and 10X estimates for next year. Revenues have doubled from $10 bln to $20 bln (2012 estimate) since 2003. More than half of ITW revenues are coming from overseas. The company reported Q2 on July 26 and dropped 10%. The share price then dropped another 10% since then during the market slide in August. There has been slowing demand in segments that had been in recovery since late 2009 / early 2010. ITW now sees organic growth of 6.5%-7.0%, about 100 bps below prior expectations. Margins are fully expected to return to highs over the next couple of years. ITW repurchased 10 mln shares (2% of shares outstanding) in Q2. ITW is currently out of favor and has been downgraded several times in recent weeks, most recently (to Sell) by Goldman Sachs on August 9 and then again this morning at Bank of America. We feel that this is good entry point with the understanding that this is a two-year hold."
For more ratings news on Illinois Tool Works click here and for the rating history of Illinois Tool Works click here.
Shares of Illinois Tool Works closed at $45.09 yesterday.
The firm states, "ITW (cut this morning to under-perform at Bank of America) has dropped 25% since hitting an all-time high last month. This is one of the more stable and safe industrial names and most suited for those looking for a less risky cyclical name. ITW is diversified with more than 800 business units spread out across more than 50 countries around the world. ITW is trading at 12X trailing twelve months earnings and 10X estimates for next year. Revenues have doubled from $10 bln to $20 bln (2012 estimate) since 2003. More than half of ITW revenues are coming from overseas. The company reported Q2 on July 26 and dropped 10%. The share price then dropped another 10% since then during the market slide in August. There has been slowing demand in segments that had been in recovery since late 2009 / early 2010. ITW now sees organic growth of 6.5%-7.0%, about 100 bps below prior expectations. Margins are fully expected to return to highs over the next couple of years. ITW repurchased 10 mln shares (2% of shares outstanding) in Q2. ITW is currently out of favor and has been downgraded several times in recent weeks, most recently (to Sell) by Goldman Sachs on August 9 and then again this morning at Bank of America. We feel that this is good entry point with the understanding that this is a two-year hold."
For more ratings news on Illinois Tool Works click here and for the rating history of Illinois Tool Works click here.
Shares of Illinois Tool Works closed at $45.09 yesterday.
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