U.S. Markets close in 5 hrs 54 mins
  • S&P 500

    4,122.26
    -6.54 (-0.16%)
     
  • Dow 30

    33,707.45
    -93.15 (-0.28%)
     
  • Nasdaq

    13,831.51
    -68.67 (-0.49%)
     
  • Russell 2000

    2,226.74
    -16.73 (-0.75%)
     
  • Crude Oil

    60.45
    +1.13 (+1.90%)
     
  • Gold

    1,732.50
    -12.30 (-0.70%)
     
  • Silver

    24.92
    -0.40 (-1.58%)
     
  • EUR/USD

    1.1910
    +0.0006 (+0.0476%)
     
  • 10-Yr Bond

    1.6800
    +0.0140 (+0.84%)
     
  • Vix

    17.51
    +0.82 (+4.91%)
     
  • GBP/USD

    1.3748
    +0.0042 (+0.3066%)
     
  • USD/JPY

    109.4280
    -0.2220 (-0.2025%)
     
  • BTC-USD

    60,400.83
    +662.33 (+1.11%)
     
  • CMC Crypto 200

    1,291.74
    -2.84 (-0.22%)
     
  • FTSE 100

    6,901.08
    -14.67 (-0.21%)
     
  • Nikkei 225

    29,538.73
    -229.33 (-0.77%)
     

Illinois Tool’s ‘Record’ Operating Margin Drives 4Q Profit Beat

  • Oops!
    Something went wrong.
    Please try again later.
support@smarteranalyst.com (Ben Mahaney)
·2 min read
  • Oops!
    Something went wrong.
    Please try again later.

Illinois Tool Works reported better-than-expected results in the fourth quarter. Shares of the industrial products and equipment manufacturer closed 2.6% higher on Friday.

Illinois Tool’s (ITW) 4Q earnings of $2.02 per share exceeded the Street estimates of $1.79 and increased 7.5% year-over-year, as its operating margin expanded by 170 basis points to a “record” 25.4%.

The company’s 4Q revenues showed marginal growth of 0.2% to $3.48 and surpassed analysts’ expectations of $3.33 billion. Organic revenues fell 0.9%, while divestitures had a negative impact of 0.7% on total sales. However, foreign currency exchange rates favorably impacted revenues by 1.8% during the reported quarter.

As for 2021, Illinois Tool projects earnings in the range of $7.60-$8 per share, reflecting year-over-year growth of 15%-21%. Analysts expect 2021 earnings to come in at $7.68 per share.

Illinois Tool forecasted 2021 revenues to grow in the range of 9%-12% year-over-year, driven by currency tailwinds of about 2%. Further, the company plans to repurchase about $1 billion worth of shares this year. (See Illinois Tool Works stock analysis on TipRanks)

Following the results, Robert W. Baird analyst Mircea Dobre raised the stock’s price target to $214 (5.8% upside potential) from $210. The analyst was positive about the company's “good execution” during 4Q and cited its strong operating margins, though organic sales were "nearly flat."

However, Dobre maintained a Hold rating as believes that there will be "limiting factors" to the company’s margin expansion into the second half of the year as demand normalizes.

The Street has a cautious outlook with a Hold consensus rating based on 6 Holds, 3 Buys and 1 Sell. The average analyst price target of $218.40 implies upside potential of about 8% to current levels. Shares have gained about 13.9% in one year.

Related News:
Skechers Dips 4.6% On 4Q Profit Miss
Monmouth’s 1Q AFFO Disappoints; Shares Drop
Pinterest 4Q Earnings Beat Estimates; Shares Pop 11.7% Pre-Market

More recent articles from Smarter Analyst: