What is Illinois Tool Works Inc. (ITW) DCF Fair Value and Intrinsic Value in 2026?

Illinois Tool Works Inc. (ITW) intrinsic value is calculated using conservative multi-stage Discounted Cash Flow (DCF) models, 5-year free cash flow trajectories, Graham Numbers, and owner earnings multiples. LocalAlpha tracks real-time margin of safety against live market prices.

What is Illinois Tool Works Inc.'s historical Return on Invested Capital (ROIC) and Moat Rating?

Illinois Tool Works Inc. operates in the Industrials sector (Specialty Industrial Machinery) with an economic moat rating of WIDE. LocalAlpha tracks 5-year audited quarterly ROIC, operating margin stability, and balance sheet solvency ratios.

What is Illinois Tool Works Inc.'s financial health rating and Piotroski F-Score?

Illinois Tool Works Inc.'s balance sheet quality is evaluated using the 9-point Piotroski F-Score, Altman Z-Score solvency model, debt-to-equity ratio, and quick/current liquidity coverage to guard against financial distress.

How does LocalAlpha monitor Illinois Tool Works Inc. (ITW) for quarterly SEC filing thesis breaks?

LocalAlpha audits Illinois Tool Works Inc.'s 10-K, 10-Q, and 8-K regulatory filings on SEC EDGAR within 15 minutes of release. If reported metrics breach an investor's custom ROIC floor, operating margin boundary, or qualitative risk criteria, an autonomous breach audit is dispatched immediately.

StocksITW

ITW

Illinois Tool Works Inc.Industrials / Specialty Industrial MachineryINTACT

Illinois Tool Works Inc. provides industrial products and equipment in North America, Europe, the Middle East, Africa, the Asia Pacific, and South America. It operates through seven segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products. The Automotive OEM segment offers plastic and metal components, fasteners, and assemblies for automobiles, light trucks, and other industrial uses. The Food Equipment segment provides warewashing, cooking, refrigeration, and food processing equipment; kitchen exhaust, ventilation, and pollution control systems; and food equipment maintenance and repair services. The Test & Measurement and Electronics segment produce and sells test and measurement; and electronic manufacturing and maintenance, repair, and operations solutions. The Welding segment produces arc welding equipment, and metal arc welding consumables and related accessories. The Polymers & Fluids segment produces adhesives, sealants, lubrication and cutting fluids, and fluids and polymers for auto aftermarket maintenance and appearance. The Construction Products segment offers engineered fastening systems and solutions for the residential construction, renovation/remodel, and commercial construction markets. The Specialty Products segment provides beverage packaging equipment and consumables, product coding and marking equipment and consumables, and appliance components and fasteners. The company serves automotive OEM and aftermarket, commercial food equipment, construction, general industrial, industrial capital goods, consumer durables, and other markets, as well as MRO markets. It distributes its products directly to industrial manufacturers, as well as through independent distributors. Illinois Tool Works Inc. was founded in 1912 and is based in Glenview, Illinois.

Share Price

$268.33

52W: $238.82 - $303.16

DCF Fair Value

$196.63

-36.5% Premium

Thesis Hub

P/E (TTM)

24.3x

ROIC

20.2%

Operating Margin

26.9%

FCF Yield

3.2%

Debt / Equity

3.35x

Piotroski Score

6/9

Altman Z-Score

3.29

Market Cap

$76.4B

Price vs. Intrinsic Value Corridor

Overvalued vs DCF ($196.63)

Historical market price overlaid against conservative DCF Fair Value & Benjamin Graham Margin of Safety bands.

Period Return (1Y)

—()

Period Range

$— - $—

DCF Fair Value

$196.63

MOS Buy Target (-25%)

$147.47

Valuation Overlays: DCF Fair Value ($196.63) 25% MOS Buy Target ($147.47) Revised Graham ($290.18) Graham Number ($50.22)

2-Stage Discounted Cash Flow (DCF) Workbench

Conservative intrinsic value model based on owner cash generation over a 10-year investment horizon. Opens with LocalAlpha's baseline assumptions (matching the fair value shown above) — adjust any input to stress-test.

Current Market Price

$268.33

DCF Fair Value

$196.65

-36.5% Premium

Starting Free Cash Flow ($M)$2,433M

$100M$2,433M (Reported)$50,000M

Stage 1 Growth (Years 1-5)13.5%

-5%10% (Target)35%

Stage 2 Growth (Years 6-10)4.5%

0%5%20%

Discount Rate (WACC / Hurdle)9.0%

6%9% (Standard)15% (High Risk)

Terminal Perpetual Growth2.5%

1% (GDP Floor)2.5% (Inflation)4.0%

Net Debt ($M)$8,900M

-$100B CashBalance Sheet+$150B Debt

10-Yr PV of Cash Flows

$26.9B

PV of Terminal Value

$38.0B

Implied Enterprise Value

$64.9B

Implied Equity Value

$56.0B

Year	Yr 1	Yr 2	Yr 3	Yr 4	Yr 5	Yr 6	Yr 7	Yr 8	Yr 9	Yr 10
Projected FCF ($M)	$2,761	$3,134	$3,557	$4,038	$4,583	$4,789	$5,004	$5,230	$5,465	$5,711
Present Value (PV)	$2,533	$2,638	$2,747	$2,860	$2,978	$2,855	$2,738	$2,625	$2,516	$2,412

Benjamin Graham & Buffett Value Models

Classical deep value metrics based on asset backing, normalized earnings power, and owner cash yield.

Graham Number-434.4% Premium

$50.21

Calculated as √(22.5 × EPS × BVPS). The maximum theoretical price a defensive investor should pay based purely on asset book value and current earnings.

EPS: $11.03BVPS: $10.16

Revised Graham Formula+7.5%

$290.18

Formula: V = (EPS × (8.5 + 2g) × 4.4) / Y where g is the conservative 7-10 yr growth rate and Y is AAA Bond Yield.

Growth Rate (g%)

Bond Yield (Y%)

Buffett Owner Earnings3% Yield

$8.11 / share

True distributable cash flow: Net Income + D&A - Maintenance CapEx. Reflects the cash Buffett would extract without hurting unit volume.

Total: $2.3BYield: 3%

Reverse DCF: Market Growth Expectation

FAIR BARRIER

11.6% CAGR (Next 10 Yrs)

At the current price of $268.33, the market is assuming the business will compound Free Cash Flow at 11.6% per year for the next decade with a 9% hurdle rate.

Value Investor Verdict

ℹ Fair expectations: Requires steady execution.

Autonomous Thesis Underwriting

Surveil ITW with Mathematical Margin of Safety Rules

Set non-negotiable floor rules for Illinois Tool Works Inc.. If a newly filed quarterly 10-Q breaks your ROIC floor, operating margin boundary, or balance sheet leverage rules, receive an autonomous breach audit within 15 minutes.

Buffett Quality

ROIC > 15% • Margin > 15% • D/E < 0.5x

Margin Floor Guard

Current Margin 26.9% • Floor > 10%

Solvency Guard

Altman-Z > 2.6 • Current Ratio > 1.5x

Track ITW & Set Alerts Browse S&P 500 Coverage

Frequently Asked Questions: Illinois Tool Works Inc. (ITW) Intrinsic Valuation

Audited fundamentals, DCF intrinsic value sensitivity, and thesis break detection parameters for Illinois Tool Works Inc..

Based on institutional multi-stage Discounted Cash Flow (DCF) modeling on audited SEC cash flows, Illinois Tool Works Inc. has an estimated DCF intrinsic fair value of $196.63 per share compared to its current market price of $268.33. This represents an estimated 36.5% premium over fair value. Additionally, its classic Benjamin Graham Number stands at $50.22.