ITW - Illinois Tool Works inches down as Barclays sees tough cycle backdrop
Illinois Tool Works (ITW) dips 0.5% in premarket trade after Barclays downgrades the stock to Underweight from Equal Weight, citing end-market trends into 2022. Price target on the stock was lowered about 8% to $220 (from $240)."ITW has enjoyed a strong share price recovery alongside its sales recovery, outperforming the S&P by ~10% since mid-February," writes Barclays analyst Julian Mitchell. "Catalysts to drive a reversal of this recent bounce in the share price and the valuation include: (i) Organic sales growth deceleratesas most of ITW's businesses will be back to prior peak levels by late 2021; (ii) Evidence that the share gain efforts are not necessarily gaining traction; (iii) Potential levelling off in the recently-stellar incremental margins, as input cost pressures ratchet higher; (iv) Lead indicators start to roll over.""ITW saw ~45% incremental margins in Q121. However, further improvement may be constrained by a leveling out of operating leverage, and
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Illinois Tool Works inches down as Barclays sees tough cycle backdrop