Since May 2025, Illinois Tool Works has been in a holding pattern, posting a small loss of 2.2% while floating around $241.23. The stock also fell short of the S&P 500’s 11.5% gain during that period.

Is now the time to buy Illinois Tool Works, or should you be careful about including it in your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free for active Edge members.

Why Is Illinois Tool Works Not Exciting?

We're swiping left on Illinois Tool Works for now. Here are three reasons we avoid ITW and a stock we'd rather own.

1. Core Business Falling Behind as Demand Plateaus

In addition to reported revenue, organic revenue is a useful data point for analyzing General Industrial Machinery companies. This metric gives visibility into Illinois Tool Works’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.

Over the last two years, Illinois Tool Works failed to grow its organic revenue. This performance was underwhelming and implies it may need to improve its products, pricing, or go-to-market strategy. It also suggests Illinois Tool Works might have to lean into acquisitions to accelerate growth, which isn’t ideal because M&A can be expensive and risky (integrations often disrupt focus).

2. Projected Revenue Growth Is Slim

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect Illinois Tool Works’s revenue to rise by 3.3%. While this projection implies its newer products and services will catalyze better top-line performance, it is still below average for the sector.

3. EPS Growth Has Stalled Over the Last Two Years

Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business.

Illinois Tool Works’s EPS was flat over the last two years, just like its revenue. This performance was underwhelming across the board.

Final Judgment

Illinois Tool Works isn’t a terrible business, but it doesn’t pass our bar. With its shares lagging the market recently, the stock trades at 22.5× forward P/E (or $241.23 per share). Investors with a higher risk tolerance might like the company, but we don’t really see a big opportunity at the moment. We're fairly confident there are better investments elsewhere. We’d recommend looking at our favorite semiconductor picks and shovels play.

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