XLI - Illinois Tool Works: Expect Sequential Improvements In Q2 But Stock Still Looks Pricey

2024-07-24 10:29:07 ET

Summary

• Illinois Tool Works will publish its Q2 results on July 30 before market hours.
• We touch upon the key themes that could dominate the earnings event.
• Despite the correction this year, the stock still looks expensive from a valuation perspective, and may not appeal to rotational specialists who focus on the dividend aristocrat universe.

Introduction

Earlier in the year, we had written a relatively positive piece on Illinois Tool Works ( ITW ), a manufacturer of diversified industrial products and equipment that are used in a whole host of end-markets (auto, food, construction, etc.). Yet, despite our relatively favorable stance on this business, we were not convinced it would make a rewarding BUY at those levels and went with a HOLD rating back then. Since then, ITW hasn't quite set the world alight and is actually down by -6% on a YTD basis, even as its industrial peers have notched up positive returns of double-digits....

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