Price to Earnings (P/E)
since 2005
Calculation
Illinois Tool Works Inc., P/E, long-term trends, calculation
| P/E | = | Share price1, 2, 3 | ÷ | Earnings per share1 (EPS) | EPS1 | = | Net income1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 11, 2022 | 25.29 | = | 217.72 | ÷ | 8.61 | 8.61 | = | 2,694 | ÷ | 312,926,939 | |
| Feb 12, 2021 | 30.18 | = | 200.98 | ÷ | 6.66 | 6.66 | = | 2,109 | ÷ | 316,662,263 | |
| Feb 14, 2020 | 23.76 | = | 187.86 | ÷ | 7.91 | 7.91 | = | 2,521 | ÷ | 318,864,237 | |
| Feb 15, 2019 | 18.46 | = | 144.21 | ÷ | 7.81 | 7.81 | = | 2,563 | ÷ | 328,108,383 | |
| Feb 15, 2018 | 33.07 | = | 163.36 | ÷ | 4.94 | 4.94 | = | 1,687 | ÷ | 341,545,719 | |
| Feb 10, 2017 | 21.80 | = | 128.00 | ÷ | 5.87 | 5.87 | = | 2,035 | ÷ | 346,550,685 | |
| Feb 12, 2016 | 17.60 | = | 91.88 | ÷ | 5.22 | 5.22 | = | 1,899 | ÷ | 363,766,897 | |
| Feb 13, 2015 | 12.66 | = | 98.26 | ÷ | 7.76 | 7.76 | = | 2,946 | ÷ | 379,447,026 | |
| Feb 14, 2014 | 19.89 | = | 78.59 | ÷ | 3.95 | 3.95 | = | 1,679 | ÷ | 424,867,793 | |
| Feb 19, 2013 | 10.10 | = | 64.19 | ÷ | 6.36 | 6.36 | = | 2,870 | ÷ | 451,435,783 | |
| Feb 17, 2012 | 13.12 | = | 56.19 | ÷ | 4.28 | 4.28 | = | 2,071 | ÷ | 483,773,784 | |
| Feb 28, 2011 | 17.66 | = | 54.10 | ÷ | 3.06 | 3.06 | = | 1,527 | ÷ | 498,419,391 | |
| Feb 26, 2010 | 24.15 | = | 45.52 | ÷ | 1.88 | 1.88 | = | 947 | ÷ | 502,408,086 | |
| Feb 27, 2009 | 9.14 | = | 27.80 | ÷ | 3.04 | 3.04 | = | 1,519 | ÷ | 499,164,971 | |
| Feb 28, 2008 | 14.08 | = | 49.95 | ÷ | 3.55 | 3.55 | = | 1,870 | ÷ | 526,912,512 | |
| Feb 26, 2007 | 17.11 | = | 52.60 | ÷ | 3.07 | 3.07 | = | 1,718 | ÷ | 558,822,857 | |
| Feb 24, 2006 | 16.27 | = | 43.29 | ÷ | 2.66 | 2.66 | = | 1,495 | ÷ | 561,837,734 |
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.
The long-term financial trajectory from 2006 to 2022 is characterized by a substantial increase in both share price and earnings per share (EPS), although the price-to-earnings (P/E) ratio demonstrates significant volatility. The share price rose from 43.29 in 2006 to 217.72 in 2022, while EPS grew from 2.66 to 8.61. This simultaneous growth indicates a general expansion in both the company's profitability and the market's valuation of its equity.
- Share Price and EPS Dynamics
- A strong upward trend in share price is observable, interrupted primarily by a significant decline in 2009 to 27.80. EPS exhibited a more erratic growth pattern, with notable dips in 2010 (1.88) and 2014 (3.95). Despite these fluctuations, the general movement shows that share price appreciation often outpaced earnings growth, particularly in the latter half of the observed period.
- P/E Ratio Trends and Volatility
- The P/E ratio reflects three distinct valuation phases. Between 2006 and 2013, the ratio was highly unstable, reaching a cyclical low of 9.14 in 2009 before spiking to 24.15 in 2010. From 2014 to 2018, a trend of valuation expansion occurred, peaking at a high of 33.07 in 2018. In the final period from 2019 to 2022, the ratio remained elevated, fluctuating between a low of 18.46 and a high of 30.18.
- Valuation Analysis
- The disparity between the 2009 P/E ratio (9.14) and the 2018 P/E ratio (33.07) suggests a shift in market sentiment, moving from a period of conservative valuation to one of significant premium. The high P/E ratios observed from 2020 onward, peaking at 30.18 in 2021, indicate that the market attributed a higher multiple to each dollar of earnings compared to the historical average of the previous decade.
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Comparison to Competitors
Illinois Tool Works Inc., P/E, long-term trends, comparison to competitors
| Illinois Tool Works Inc. | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | |
|---|---|---|---|---|---|---|---|---|
| Feb 11, 2022 | 25.29 | — | 16.82 | 27.77 | — | 23.14 | 16.70 | 36.79 |
| Feb 12, 2021 | 30.18 | — | 36.80 | 37.46 | 19.67 | 29.63 | 13.44 | — |
| Feb 14, 2020 | 23.76 | — | 12.36 | 18.06 | — | 20.97 | 19.87 | 24.41 |
| Feb 15, 2019 | 18.46 | 21.87 | 12.42 | 15.92 | — | 16.02 | 16.88 | 19.74 |
| Feb 15, 2018 | 33.07 | 24.68 | 126.80 | 11.90 | — | 67.20 | 48.70 | 21.97 |
| Feb 10, 2017 | 21.80 | 20.50 | — | 16.96 | 32.22 | 19.29 | 14.14 | 17.55 |
| Feb 12, 2016 | 17.60 | 14.89 | 18.07 | 13.17 | — | 16.70 | 18.36 | 9.31 |
| Feb 13, 2015 | 12.66 | 19.15 | 14.01 | 18.73 | 17.17 | 19.27 | 16.86 | 17.52 |
| Feb 14, 2014 | 19.89 | 21.10 | 16.25 | 19.35 | 19.59 | 18.91 | 17.56 | 17.51 |
| Feb 19, 2013 | 10.10 | 14.71 | 11.02 | 23.99 | 17.57 | 18.78 | 10.34 | 16.07 |
| Feb 17, 2012 | 13.12 | 14.09 | 15.11 | 12.83 | 15.52 | 22.54 | 10.81 | 15.29 |
| Feb 28, 2011 | 17.66 | 16.17 | 24.14 | 19.59 | 19.49 | 22.48 | 9.58 | 17.84 |
| Feb 26, 2010 | 24.15 | 33.40 | 40.66 | 29.60 | 16.09 | 13.44 | 9.56 | 16.33 |
| Feb 27, 2009 | 9.14 | 11.63 | 4.51 | 5.65 | 6.62 | 8.71 | 8.47 | 9.57 |
| Feb 28, 2008 | 14.08 | 15.99 | 12.54 | 11.89 | 15.45 | 17.07 | 14.15 | 16.61 |
| Feb 26, 2007 | 17.11 | 32.40 | 12.28 | 12.47 | 17.11 | 18.37 | 16.95 | 18.16 |
| Feb 24, 2006 | 16.27 | 22.62 | 17.17 | 12.82 | 21.07 | 20.71 | 17.45 | 18.76 |
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/E, long-term trends, comparison to sector (capital goods)
| Illinois Tool Works Inc. | Capital Goods | |
|---|---|---|
| Feb 11, 2022 | 25.29 | 57.31 |
| Feb 12, 2021 | 30.18 | 123.55 |
| Feb 14, 2020 | 23.76 | 39.03 |
| Feb 15, 2019 | 18.46 | 56.00 |
| Feb 15, 2018 | 33.07 | 55.16 |
| Feb 10, 2017 | 21.80 | 23.62 |
| Feb 12, 2016 | 17.60 | 33.10 |
| Feb 13, 2015 | 12.66 | 17.47 |
| Feb 14, 2014 | 19.89 | 18.85 |
| Feb 19, 2013 | 10.10 | 15.74 |
| Feb 17, 2012 | 13.12 | 15.20 |
| Feb 28, 2011 | 17.66 | 18.46 |
| Feb 26, 2010 | 24.15 | 17.22 |
| Feb 27, 2009 | 9.14 | 7.48 |
| Feb 28, 2008 | 14.08 | 15.28 |
| Feb 26, 2007 | 17.11 | 17.63 |
| Feb 24, 2006 | 16.27 | 20.11 |
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/E, long-term trends, comparison to industry (industrials)
| Illinois Tool Works Inc. | Industrials | |
|---|---|---|
| Feb 11, 2022 | 25.29 | 35.59 |
| Feb 12, 2021 | 30.18 | — |
| Feb 14, 2020 | 23.76 | 43.95 |
| Feb 15, 2019 | 18.46 | 33.70 |
| Feb 15, 2018 | 33.07 | 29.83 |
| Feb 10, 2017 | 21.80 | 22.92 |
| Feb 12, 2016 | 17.60 | 22.89 |
| Feb 13, 2015 | 12.66 | 18.79 |
| Feb 14, 2014 | 19.89 | 19.13 |
| Feb 19, 2013 | 10.10 | 17.77 |
| Feb 17, 2012 | 13.12 | 15.75 |
| Feb 28, 2011 | 17.66 | 18.72 |
| Feb 26, 2010 | 24.15 | 19.17 |
| Feb 27, 2009 | 9.14 | 9.73 |
| Feb 28, 2008 | 14.08 | 16.93 |
| Feb 26, 2007 | 17.11 | 11.65 |
| Feb 24, 2006 | 16.27 | 50.62 |
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).