Illinois Tool Works Inc. (ITW) DCF Valuation
Transparent DCF models put Illinois Tool Works Inc. (ITW)'s fair value in a range of $122.50 – $205.38 — the low end is TGM's conservative base case (5% FCF growth, 10% discount), the high end the analyst consensus (FMP). Today's price of $251.16 sits above that range — by these conservative assumptions it looks richly valued; the reverse-DCF below is the better lens for a high-growth name.
Reverse DCF: at today's $251.16, the market is pricing in roughly +13.4%/yr free-cash-flow growth over the next decade (at a 10% required return) — versus its actual 5-year FCF CAGR of +1.4%. The price is betting on acceleration above its track record.
Current Price
$251.16
Fair-Value Range
$122.50 – $205.38
Market-Implied Growth
+13.4%/yr
vs +1.4% 5Y actual
ITW DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Illustrative model — not investment advice. Defaults to a conservative base case; the analyst (FMP) DCF, where available, is shown as a reference below.
Base inputs: FCF $2.6B · 0.29B shares · net debt $8.1B
Estimated Fair Value
$122.50
-51.2% vs $251.16
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $251.16; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.0% | $159 | $169 | $180 | $194 | $210 |
| 9.0% | $133 | $139 | $147 | $156 | $166 |
| 10.0% | $113 | $117 | $122 | $129 | $136 |
| 11.0% | $96.71 | $100 | $104 | $108 | $113 |
| 12.0% | $83.96 | $86.53 | $89.37 | $92.53 | $96.06 |
About Illinois Tool Works Inc.
Illinois Tool Works Inc. is a global enterprise specializing in the production and distribution of a wide array of industrial goods and specialized equipment. The company operates through seven distinct divisions: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products. The Automotive OEM division supplies plastic and metal components, various fastening solutions, and integrated assemblies for automobiles, light-duty trucks, and other industrial applications. Its Food Equipment segment delivers commercial kitchen appliances for washing, refrigeration, cooking, and food processing, alongside comprehensive kitchen exhaust, ventilation, and pollution control systems, and offers related maintenance and repair services. The Test & Measurement and Electronics unit manufactures and sells machinery, expendable supplies, and accompanying software designed for assessing materials and structural integrity, in addition to equipment and consumables critical for the creation of electronic subassemblies and microelectronic components. The Welding division focuses on arc welding apparatus, coupled with metal arc welding consumables and associated accessories. The Polymers & Fluids segment produces adhesives, sealing compounds, lubrication and cutting fluids, and various fluids and polymers intended for automotive aftermarket upkeep and cosmetic purposes. The Construction Products segment provides purpose-engineered fastening systems and comprehensive solutions for new housing, renovation projects, and commercial building industries. Lastly, the Specialty Products segment delivers machinery and supplies for beverage packaging, equipment and expendables for product identification and marking, and specialized components and fasteners for appliances. ITW's broad clientele encompasses sectors such as automotive original equipment manufacturers (OEMs) and their suppliers, the commercial food service industry, construction companies, general industrial enterprises, and the automotive aftermarket. The corporation distributes its offerings directly to industrial manufacturers and via an extensive network of independent distributors. Established in 1912, Illinois Tool Works Inc. is headquartered in Glenview, Illinois.
- Sector
- Industrials
- Industry
- Industrial - Machinery
- CEO
- Christopher A. O'Herlihy