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Illinois Tool Works (Illinois Tool Works) PE Ratio

: 26.05 (As of Today)
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The PE Ratio, or Price-to-Earnings ratio, or P/E Ratio, is a financial ratio used to compare a company's market price to its Earnings per Share (Diluted). As of today (2024-04-16), Illinois Tool Works's share price is $253.74. Illinois Tool Works's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Dec. 2023 was $9.74. Therefore, Illinois Tool Works's PE Ratio for today is 26.05.


The historical rank and industry rank for Illinois Tool Works's PE Ratio or its related term are showing as below:

ITW' s PE Ratio Range Over the Past 10 Years
Min: 10.99   Med: 22.78   Max: 36.81
Current: 26.05


During the past 13 years, the highest PE Ratio of Illinois Tool Works was 36.81. The lowest was 10.99. And the median was 22.78.


ITW's PE Ratio is ranked worse than
59.77% of 2257 companies
in the Industrial Products industry
Industry Median: 21.78 vs ITW: 26.05

Illinois Tool Works's Earnings per Share (Diluted) for the three months ended in Dec. 2023 was $2.38. Its Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Dec. 2023 was $9.74.

As of today (2024-04-16), Illinois Tool Works's share price is $253.74. Illinois Tool Works's EPS without NRI for the trailing twelve months (TTM) ended in Dec. 2023 was $9.78. Therefore, Illinois Tool Works's PE Ratio without NRI for today is 25.94.

During the past 13 years, Illinois Tool Works's highest PE Ratio without NRI was 38.22. The lowest was 15.84. And the median was 23.07.

Illinois Tool Works's EPS without NRI for the three months ended in Dec. 2023 was $2.42. Its EPS without NRI for the trailing twelve months (TTM) ended in Dec. 2023 was $9.78.

During the past 12 months, Illinois Tool Works's average EPS without NRI Growth Rate was 6.00% per year. During the past 3 years, the average EPS without NRI Growth Rate was 14.10% per year. During the past 5 years, the average EPS without NRI Growth Rate was 6.30% per year. During the past 10 years, the average EPS without NRI Growth Rate was 9.60% per year.

During the past 13 years, Illinois Tool Works's highest 3-Year average EPS without NRI Growth Rate was 155.30% per year. The lowest was -14.10% per year. And the median was 12.00% per year.

Illinois Tool Works's EPS (Basic) for the three months ended in Dec. 2023 was $2.39. Its EPS (Basic) for the trailing twelve months (TTM) ended in Dec. 2023 was $9.77.


Illinois Tool Works PE Ratio Historical Data

The historical data trend for Illinois Tool Works's PE Ratio can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Illinois Tool Works Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
PE Ratio
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 23.21 30.75 29.00 22.55 26.89

Illinois Tool Works Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
PE Ratio Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 22.55 24.35 24.74 22.34 26.89

Competitive Comparison

For the Specialty Industrial Machinery subindustry, Illinois Tool Works's PE Ratio, along with its competitors' market caps and PE Ratio data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Illinois Tool Works PE Ratio Distribution

For the Industrial Products industry and Industrials sector, Illinois Tool Works's PE Ratio distribution charts can be found below:

* The bar in red indicates where Illinois Tool Works's PE Ratio falls into.



Illinois Tool Works PE Ratio Calculation

The PE Ratio, or Price-to-Earnings ratio, or P/E Ratio, is a financial ratio used to compare a company's market price to its Earnings per Share (Diluted). It is the most widely used ratio in the valuation of stocks.

Illinois Tool Works's PE Ratio for today is calculated as

PE Ratio=Share Price/Earnings per Share (Diluted) (TTM)
=253.74/9.740
=26.05

Illinois Tool Works's Share Price of today is $253.74.
Illinois Tool Works's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Dec. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $9.74.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

It can also be calculated from the numbers for the whole company:


There are at least three kinds of PE Ratios used by different investors. They are Trailing Twelve Month PE Ratio or PE Ratio (TTM), Forward PE Ratio, or PE Ratio without NRI. A new PE Ratio based on inflation-adjusted normalized PE Ratio is called Shiller PE Ratio, after Yale professor Robert Shiller.

In the calculation of PE Ratio, the earnings per share used are the earnings per share over the past 12 months. For Forward PE Ratio, the earnings are the expected earnings for the next twelve months. In the case of PE Ratio without NRI, the reported earnings less the non-recurring items are used.

For Shiller PE Ratio, the earnings of the past 10 years are inflation-adjusted and averaged. Since it looks at the average over the last 10 years, Shiller PE Ratio is also called PE10.


Illinois Tool Works  (NYSE:ITW) PE Ratio Explanation

The PE Ratio can be viewed as the number of years it takes for the company to earn back the price you pay for the stock. For example, if a company earns $2 a share per year, and the stock is traded at $30, the PE Ratio is 15. Therefore it takes 15 years for the company to earn back the $30 you paid for its stock, assuming the earnings stays constant over the next 15 years.

In real business, earnings never stay constant. If a company can grow its earnings, it takes fewer years for the company to earn back the price you pay for the stock. If a company's earnings decline it takes more years. As a shareholder, you want the company to earn back the price you pay as soon as possible. Therefore, lower P/E stocks are more attractive than higher P/E stocks so long as the PE Ratio is positive. Also for stocks with the same PE Ratio, the one with faster growth business is more attractive.

If a company loses money, the PE Ratio becomes meaningless.

To compare stocks with different growth rates, Peter Lynch invented a ratio called PEG Ratio. PEG Ratio is defined as the PE Ratio divided by the growth ratio. He thinks a company with a PE Ratio equal to its growth rate is fairly valued. Still he said he would rather buy a company growing 20% a year with a PE Ratio of 20, instead of a company growing 10% a year with a PE Ratio of 10.

Because the PE Ratio measures how long it takes to earn back the price you pay, the PE Ratio can be applied to the stocks across different industries. That is why it is the one of the most important and widely used indicators for the valuation of stocks.

Similar to the PE Ratio without NRI or PS Ratio or Price-to-Operating-Cash-Flow or Price-to-Free-Cash-Flow , the PE Ratio measures the valuation based on the earning power of the company. This is where it is different from the PB Ratio , which measures the valuation based on the company's balance sheet.


Be Aware

Investors need to be aware that the PE Ratio can be misleading a lot of times, especially when the underlying business is cyclical and unpredictable. As Peter Lynch pointed out, cyclical businesses have higher profit margins at the peaks of the business cycles. Their earnings are high and PE Ratios are artificially low. It is usually a bad idea to buy a cyclical business when the PE Ratio is low. A better ratio to identify the time to buy a cyclical businesses is the PS Ratio .

PE Ratio can also be affected by non-recurring-items such as the sale of part of businesses. This may increase for the current year or quarter dramatically. But it cannot be repeated over and over. Therefore PE Ratio without NRI is a more accurate indication of valuation than PE Ratio.


Illinois Tool Works PE Ratio Related Terms

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Illinois Tool Works (Illinois Tool Works) Business Description

Traded in Other Exchanges
Address
155 Harlem Avenue, Glenview, IL, USA, 60025
Illinois Tool Works is a diversified global manufacturer that produces specialized industrial equipment, consumables, and related services. The firm operates 87 global divisions through seven distinct operating segments: automotive OEM, construction products, food equipment, specialty products, test/measurement and electronics, polymers and fluids, and welding. About half of its revenue comes from its operations in North America, with the remainder originating from international markets. ITW takes a bottom-up and decentralized approach to portfolio management, with the exception that each segment must apply its 80/20 operating process modeled on the Pareto principle.
Executives
Smith David Byron Jr director 155 HARLEM AVE., GLENVIEW IL 60025
Randall J Scheuneman officer: VP & Chief Accounting Officer 155 HARLEM AVE., GLENVIEW IL 60025
Christopher A O'herlihy officer: Executive Vice President 155 HARLEM AVE., GLENVIEW IL 60025
Ernest Scott Santi director, officer: President & CEO ILLINOIS TOOL WORKS INC., 155 HARLEM AVE., GLENVIEW IL 60025
Michael M Larsen officer: SVP & CFO ILLINOIS TOOL WORKS INC., 155 HARLEM AVE., GLENVIEW IL 60025
Kelly J Grier director 155 HARLEM AVE., GLENVIEW IL 60025
Lei Zhang Schlitz officer: Executive Vice President 5757 N. GREENBAY AVENUE, GLENDALE WI 53129
Patricia A. Hartzell officer: Executive Vice President 155 HARLEM AVE., GLENVIEW IL 60025
Javier Gracia Carbonell officer: Executive Vice President 155 HARLEM AVE., GLENVIEW IL 60025
Mary Katherine Lawler officer: SVP & Chief HR Officer ILLINOIS TOOL WORKS INC., 155 HARLEM AVE, GLENVIEW IL 60025
Jay L Henderson director 50 SOUTH LASALLE ST, CHICAGO IL 60603
Jennifer Kaplan Schott officer: SVP, General Counsel & Secy. 155 HARLEM AVE., GLENVIEW IL 60025
Darrell L Ford director 55 GLENLAKE PARKWAY, NE, ATLANTA GA 30328
Finch Norman D. Jr. officer: Sr. VP, General Counsel & Secy C/O ILLINOIS TOOL WORKS INC., 155 HARLEM AVE., GLENVIEW IL 60025
Michael R. Zimmerman officer: Executive Vice President 155 HARLEM AVE., GLENVIEW IL 60025