Stock Analysis on Net

Illinois Tool Works Inc. (NYSE:ITW)

$22.49

This company has been moved to the archive! The financial data has not been updated since February 11, 2022.

Price to Book Value (P/BV)
since 2005

Microsoft Excel

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Calculation

Illinois Tool Works Inc., P/BV, long-term trends, calculation

Microsoft Excel

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).

1 US$

2 Data adjusted for splits and stock dividends.

3 Closing price as at the filing date of Illinois Tool Works Inc. Annual Report.


Share Price Trend
The share price exhibited significant fluctuations over the analyzed period. Initially, it rose from $43.29 in 2006 to a peak of $54.1 in 2011, followed by a steady upward trend reaching its highest value at $217.72 in 2022. The share price dropped sharply in 2009, falling to $27.8, likely reflecting broader market conditions, but recovered quickly and demonstrated consistent growth thereafter, particularly from 2013 onwards.
Book Value Per Share (BVPS) Trend
The book value per share displayed moderate volatility during the timeframe. It increased from $13.43 in 2006 to a peak of $23.39 in 2013 but then experienced a decline in subsequent years, reaching a low of $9.49 in 2020. From 2020 to 2022, there was a slight recovery with BVPS moving back up to $11.58. Overall, BVPS growth was not sustained in the later years, showing periods of contraction.
Price-to-Book Value (P/BV) Ratio Trend
The P/BV ratio varied considerably, indicating changes in market valuation relative to the company's book value. It was relatively stable around 3.0 between 2006 and 2008 before dropping to a low of 1.81 in 2009, coinciding with the share price decline and relatively higher book value. After 2009, the ratio increased sharply, reaching a high of 20.01 in 2021, suggesting that the market price grew disproportionally faster than the book value. This elevated P/BV ratio slightly decreased to 18.79 in 2022 but remained significantly high, implying strong investor confidence or potentially overvaluation by traditional book value measures.
Summary of Financial Metrics Relationship
The data reflect a market where the share price notably outpaced book value growth, particularly after the financial downturn in 2009. The recovery and expansion in share price, contrasted with declining or stagnant book value in the latter years, resulted in escalating P/BV ratios. This pattern suggests either improved market sentiment, expectations of future earnings growth, or intangible factors not captured in the book value. The sharp rise in P/BV from 2013 onward underscores a shift in valuation dynamics relative to underlying net assets.

Comparison to Competitors

Illinois Tool Works Inc., P/BV, long-term trends, comparison to competitors

Microsoft Excel

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).


Comparison to Sector (Capital Goods)

Illinois Tool Works Inc., P/BV, long-term trends, comparison to sector (capital goods)

Microsoft Excel

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).


Comparison to Industry (Industrials)

Illinois Tool Works Inc., P/BV, long-term trends, comparison to industry (industrials)

Microsoft Excel

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).