Common Stock Valuation Ratios (Price Multiples)
Quarterly Data
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
Historical Valuation Ratios (Summary)
Illinois Tool Works Inc., historical price multiples (quarterly data)
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
- Price to earnings (P/E) ratio
- The P/E ratio exhibited a general downward trend from the first observed value in March 2018 at 33.07 to a low of 18.46 in December 2018. Subsequently, it fluctuated moderately between approximately 19.9 and 23.76 throughout 2019. In 2020, the ratio rose significantly, peaking at 33.82 in December, before declining again in 2021 to values around 25.29 by year-end. This pattern indicates varying market valuation relative to earnings, with notable investor optimism in late 2020 followed by moderation in 2021.
- Price to operating profit (P/OP) ratio
- The P/OP ratio initially decreased from 15.97 in March 2018 to 12.02 by December 2018, suggesting improved operating profit valuation during this period. Thereafter, the ratio rose steadily and peaked at 24.75 in December 2021. This gradual increase indicates a rising market price relative to operating profit over time, particularly marked through 2020 and 2021, reflecting either increasing investor confidence or a deceleration in operating profit growth relative to stock price.
- Price to sales (P/S) ratio
- The P/S ratio demonstrated a declining trend from 3.9 in March 2018 to 2.9 in December 2018, followed by a persistent upward trajectory reaching a peak of 5.81 in December 2021. This continuous increase from 2019 onward suggests growing stock price valuations relative to company sales, possibly reflecting expectations of future revenue growth or improved profitability.
- Price to book value (P/BV) ratio
- The P/BV ratio showed a steady increase overall, starting from 10.73 in March 2017 and rising consistently through the years to reach 25.21 in June 2020. Post mid-2020, the ratio fluctuated between approximately 18.79 and 23, maintaining elevated valuation levels relative to book value through 2021. This indicates an increasing premium being placed on the company's net asset value, which may be influenced by factors such as asset quality, growth prospects, or investor sentiment.
Price to Earnings (P/E)
Illinois Tool Works Inc., historical P/E calculation (quarterly data)
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 312,926,939 | 313,880,725 | 314,967,814 | 315,882,732 | 316,662,263 | 316,520,261 | 316,163,249 | 315,932,054 | 318,864,237 | 321,406,096 | 323,478,160 | 325,775,111 | 328,108,383 | 331,801,491 | 335,352,977 | 338,762,621 | 341,545,719 | 342,598,985 | 344,149,420 | 345,451,023 | ||||||
| Selected Financial Data (US$) | ||||||||||||||||||||||||||
| Net income (in millions) | 609) | 639) | 775) | 671) | 642) | 582) | 319) | 566) | 641) | 660) | 623) | 597) | 607) | 638) | 666) | 652) | (76) | 640) | 587) | 536) | ||||||
| Earnings per share (EPS)2 | 8.61 | 8.69 | 8.48 | 7.01 | 6.66 | 6.66 | 6.91 | 7.88 | 7.91 | 7.74 | 7.62 | 7.70 | 7.81 | 5.67 | 5.61 | 5.32 | 4.94 | 0.00 | 0.00 | 0.00 | ||||||
| Share price1, 3 | 217.72 | 227.87 | 226.98 | 237.06 | 200.98 | 195.88 | 187.95 | 161.01 | 187.86 | 169.94 | 151.67 | 157.41 | 144.21 | 129.47 | 139.55 | 145.47 | 163.36 | 159.06 | 142.88 | 139.60 | ||||||
| Valuation Ratio | ||||||||||||||||||||||||||
| P/E ratio4 | 25.29 | 26.23 | 26.78 | 33.82 | 30.18 | 29.41 | 27.18 | 20.43 | 23.76 | 21.96 | 19.90 | 20.45 | 18.46 | 22.85 | 24.87 | 27.33 | 33.07 | — | — | — | ||||||
| Benchmarks | ||||||||||||||||||||||||||
| P/E Ratio, Competitors5 | ||||||||||||||||||||||||||
| Boeing Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Caterpillar Inc. | 16.82 | 21.38 | 25.50 | 37.92 | 36.80 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Eaton Corp. plc | 27.77 | 33.08 | 34.43 | 40.32 | 37.46 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| GE Aerospace | — | — | — | — | 19.67 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Honeywell International Inc. | 23.14 | 27.35 | 31.83 | 33.71 | 29.63 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Lockheed Martin Corp. | 16.70 | 15.11 | 14.27 | 15.48 | 13.44 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| RTX Corp. | 36.79 | 40.28 | 60.91 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Data adjusted for splits and stock dividends.
2 Q4 2021 Calculation
EPS
= (Net incomeQ4 2021
+ Net incomeQ3 2021
+ Net incomeQ2 2021
+ Net incomeQ1 2021)
÷ No. shares of common stock outstanding
= (609,000,000 + 639,000,000 + 775,000,000 + 671,000,000)
÷ 312,926,939 = 8.61
3 Closing price as at the filing date of Illinois Tool Works Inc. Quarterly or Annual Report.
4 Q4 2021 Calculation
P/E ratio = Share price ÷ EPS
= 217.72 ÷ 8.61 = 25.29
5 Click competitor name to see calculations.
The data reveals several distinct trends in the financial performance and market valuation over the periods examined.
- Share Price
- The share price exhibited an overall upward trajectory from March 2017 through to December 2021. Initially, it fluctuated moderately around the 130 to 160 US$ range until the end of 2018. Thereafter, a general increase is observed, with notable peaks in late 2019 and again in 2021, reaching a high of approximately 237 US$ in March 2021 before slightly declining towards the end of that year.
- Earnings Per Share (EPS)
- EPS data, available from March 2018 onward, shows a steady increase up to the first quarter of 2019, reaching approximately 7.8 US$. Between 2019 and early 2020, EPS remained relatively stable around the 7.6 to 7.9 US$ level. Starting in mid-2020, a decline is observed with EPS dropping to roughly 6.6 US$ by the end of that year. However, EPS recovered in 2021, surpassing previous highs and reaching close to 8.7 US$ in the third quarter before slightly decreasing toward the end of 2021.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio shows some variability that inversely relates to the share price and EPS movements. After available data begins in early 2018 at a higher ratio of about 33, the ratio generally declined through 2018 to about 18-22, coinciding with rising EPS. From 2019 onward, the P/E ratio experienced an uptrend, increasing through 2020 alongside EPS declines and fluctuating share prices, peaking near 33.8 in late 2020. The ratio then decreased once again in 2021 to the mid-20s range.
In summary, during the observed timeframe, the company’s market valuation displayed growth accompanied by fluctuating earnings performance. The P/E ratio dynamics suggest changing investor perceptions of value, influenced by the interplay of share price movement and underlying earnings performance. Notably, 2020 marked a period of earnings softness and elevated P/E ratios, which corrected partially in 2021 as earnings improved and the valuation multiple moderated.
Price to Operating Profit (P/OP)
Illinois Tool Works Inc., historical P/OP calculation (quarterly data)
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 312,926,939 | 313,880,725 | 314,967,814 | 315,882,732 | 316,662,263 | 316,520,261 | 316,163,249 | 315,932,054 | 318,864,237 | 321,406,096 | 323,478,160 | 325,775,111 | 328,108,383 | 331,801,491 | 335,352,977 | 338,762,621 | 341,545,719 | 342,598,985 | 344,149,420 | 345,451,023 | ||||||
| Selected Financial Data (US$) | ||||||||||||||||||||||||||
| Operating income (in millions) | 834) | 845) | 893) | 905) | 883) | 789) | 449) | 761) | 824) | 868) | 871) | 839) | 860) | 889) | 932) | 903) | 850) | 961) | 874) | 809) | ||||||
| Operating profit per share2 | 11.11 | 11.23 | 11.02 | 9.58 | 9.10 | 8.92 | 9.18 | 10.52 | 10.67 | 10.70 | 10.69 | 10.80 | 10.92 | 10.77 | 10.87 | 10.59 | 10.23 | 0.00 | 0.00 | 0.00 | ||||||
| Share price1, 3 | 217.72 | 227.87 | 226.98 | 237.06 | 200.98 | 195.88 | 187.95 | 161.01 | 187.86 | 169.94 | 151.67 | 157.41 | 144.21 | 129.47 | 139.55 | 145.47 | 163.36 | 159.06 | 142.88 | 139.60 | ||||||
| Valuation Ratio | ||||||||||||||||||||||||||
| P/OP ratio4 | 19.59 | 20.28 | 20.60 | 24.75 | 22.08 | 21.96 | 20.48 | 15.30 | 17.61 | 15.89 | 14.18 | 14.57 | 13.20 | 12.02 | 12.84 | 13.73 | 15.97 | — | — | — | ||||||
| Benchmarks | ||||||||||||||||||||||||||
| P/OP Ratio, Competitors5 | ||||||||||||||||||||||||||
| Boeing Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Caterpillar Inc. | 15.87 | 16.57 | 18.76 | 26.25 | 24.23 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Eaton Corp. plc | 19.33 | 22.62 | 27.06 | 30.03 | 25.83 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| GE Aerospace | 17.46 | 20.90 | 23.40 | 35.58 | 25.64 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Honeywell International Inc. | 20.68 | 23.54 | 25.98 | 28.28 | 24.86 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Lockheed Martin Corp. | 11.56 | 10.22 | 11.57 | 12.37 | 10.63 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| RTX Corp. | 28.68 | 35.30 | 46.33 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Data adjusted for splits and stock dividends.
2 Q4 2021 Calculation
Operating profit per share
= (Operating incomeQ4 2021
+ Operating incomeQ3 2021
+ Operating incomeQ2 2021
+ Operating incomeQ1 2021)
÷ No. shares of common stock outstanding
= (834,000,000 + 845,000,000 + 893,000,000 + 905,000,000)
÷ 312,926,939 = 11.11
3 Closing price as at the filing date of Illinois Tool Works Inc. Quarterly or Annual Report.
4 Q4 2021 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 217.72 ÷ 11.11 = 19.59
5 Click competitor name to see calculations.
- Share Price Trend
- The share price exhibited fluctuations over the analyzed periods. Initially, it rose from 139.6 to a peak of 163.36 by the end of 2017, then experienced a decline during 2018, falling to a low of 129.47 in September 2018. Subsequently, the price recovered steadily through 2019, reaching a high of 187.86 in December 2019. In 2020, volatility increased with a sharp drop in March 2020 to 161.01, followed by consistent growth exceeding previous highs, culminating in a peak of 237.06 by March 2021. However, slight declines occurred in the latter part of 2021, with the price ending at 217.72 in December 2021.
- Operating Profit Per Share (OPPS) Trend
- Operating profit per share became available beginning March 2018, showing moderate increases from 10.23 to a peak of 10.92 in March 2019. Thereafter, a gradual decline was observed throughout 2019 and 2020, with values dropping to a low of 8.92 in June 2020. A recovery phase started in late 2020, with OPPS rising steadily through 2021, peaking at 11.23 in September 2021 and slightly tapering off to 11.11 by December 2021. This suggests resilience and operational improvement following the mid-period downturn.
- Price to Operating Profit (P/OP) Ratio Trend
- The Price to Operating Profit ratio followed an inverse pattern relative to OPPS and share price dynamics. Initially recorded values in early 2018 showed a decreasing trend from 15.97 down to 12.02 by the end of 2018, indicating improving earnings relative to price. During 2019, the ratio fluctuated upward, peaking at 17.61 in December 2019, reflecting share price increases outpacing profit growth at that time. In 2020, a marked increase in the ratio occurred, reaching a high of 24.75 in December 2020, possibly reflecting market uncertainties and compressed earnings. In 2021, the ratio declined moderately, stabilizing near 20, suggesting normalization of market valuation relative to operating profit.
- Overall Insights
- The share price demonstrated resilience and recovery over the five-year period, particularly after the dip in early 2020. Operating profit per share declined during the market disruption period but recovered strongly thereafter. The P/OP ratio's volatility indicates varying investor confidence and market valuation shifts relative to operational performance. The data reflects a period of external challenges with subsequent operational stabilization and market recovery.
Price to Sales (P/S)
Illinois Tool Works Inc., historical P/S calculation (quarterly data)
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 312,926,939 | 313,880,725 | 314,967,814 | 315,882,732 | 316,662,263 | 316,520,261 | 316,163,249 | 315,932,054 | 318,864,237 | 321,406,096 | 323,478,160 | 325,775,111 | 328,108,383 | 331,801,491 | 335,352,977 | 338,762,621 | 341,545,719 | 342,598,985 | 344,149,420 | 345,451,023 | ||||||
| Selected Financial Data (US$) | ||||||||||||||||||||||||||
| Operating revenue (in millions) | 3,679) | 3,556) | 3,676) | 3,544) | 3,475) | 3,307) | 2,564) | 3,228) | 3,469) | 3,479) | 3,609) | 3,552) | 3,580) | 3,613) | 3,831) | 3,744) | 3,629) | 3,615) | 3,599) | 3,471) | ||||||
| Sales per share2 | 46.19 | 45.40 | 44.46 | 40.81 | 39.71 | 39.71 | 40.30 | 43.63 | 44.25 | 44.24 | 44.37 | 44.74 | 45.01 | 44.66 | 44.19 | 43.06 | 41.91 | 0.00 | 0.00 | 0.00 | ||||||
| Share price1, 3 | 217.72 | 227.87 | 226.98 | 237.06 | 200.98 | 195.88 | 187.95 | 161.01 | 187.86 | 169.94 | 151.67 | 157.41 | 144.21 | 129.47 | 139.55 | 145.47 | 163.36 | 159.06 | 142.88 | 139.60 | ||||||
| Valuation Ratio | ||||||||||||||||||||||||||
| P/S ratio4 | 4.71 | 5.02 | 5.11 | 5.81 | 5.06 | 4.93 | 4.66 | 3.69 | 4.25 | 3.84 | 3.42 | 3.52 | 3.20 | 2.90 | 3.16 | 3.38 | 3.90 | — | — | — | ||||||
| Benchmarks | ||||||||||||||||||||||||||
| P/S Ratio, Competitors5 | ||||||||||||||||||||||||||
| Boeing Co. | 1.87 | 1.93 | 2.20 | 2.44 | 1.96 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Caterpillar Inc. | 2.26 | 2.41 | 2.59 | 3.23 | 2.83 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Eaton Corp. plc | 3.03 | 3.51 | 3.39 | 3.25 | 2.96 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| GE Aerospace | 1.50 | 1.64 | 1.60 | 1.68 | 1.41 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Honeywell International Inc. | 3.73 | 4.32 | 4.66 | 4.78 | 4.34 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Lockheed Martin Corp. | 1.57 | 1.38 | 1.53 | 1.63 | 1.40 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| RTX Corp. | 2.21 | 2.09 | 2.14 | 2.07 | 1.95 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Data adjusted for splits and stock dividends.
2 Q4 2021 Calculation
Sales per share
= (Operating revenueQ4 2021
+ Operating revenueQ3 2021
+ Operating revenueQ2 2021
+ Operating revenueQ1 2021)
÷ No. shares of common stock outstanding
= (3,679,000,000 + 3,556,000,000 + 3,676,000,000 + 3,544,000,000)
÷ 312,926,939 = 46.19
3 Closing price as at the filing date of Illinois Tool Works Inc. Quarterly or Annual Report.
4 Q4 2021 Calculation
P/S ratio = Share price ÷ Sales per share
= 217.72 ÷ 46.19 = 4.71
5 Click competitor name to see calculations.
The share price of the company exhibited a general upward trend from the beginning of 2017 to the end of 2021, with some fluctuations along the way. Starting at $139.6 at the end of March 2017, the price increased to a peak above $200 by the end of 2020 and reached a maximum of approximately $237.06 in the first quarter of 2021. Following this peak, the price experienced a slight decline but remained above $210 by the end of 2021.
Sales per share data are available starting from the first quarter of 2018. The sales per share initially showed gradual growth, rising from approximately $41.91 in March 2018 to about $45.01 in March 2019. After this, sales per share remained relatively stable, fluctuating slightly around the mid-40s but experienced a noticeable drop in 2020, descending to the low 40s and briefly falling to around $39.71 in the second and third quarters. Subsequently, the sales per share began to recover, returning to levels above $44 by the end of 2021.
The price-to-sales (P/S) ratio shows more pronounced variations. Starting at 3.9 in March 2018, the ratio declined steadily to a low of approximately 2.9 by December 2018, indicating a relative undervaluation compared to sales. Following this trough, the P/S ratio increased considerably, reaching over 5.8 in the final quarter of 2020 and maintaining elevated levels above 4.7 through to the end of 2021. This rise in the P/S ratio amidst fluctuating sales suggests an increasing market valuation relative to the company's sales during this latter period.
Overall, the data indicate a strengthening market confidence in the company reflected by rising share prices and an increasing P/S ratio, particularly after the initial COVID-19 pandemic impact seen in 2020. Although sales per share experienced a dip around this time, the recovery afterward combined with continued share price appreciation suggests positive investor sentiment and expectations for future performance.
- Share Price Trend
- General upward movement from $139.6 to over $230, with fluctuations and a peak in early 2021.
- Sales Per Share Trend
- Gradual increase followed by a dip in 2020 and subsequent recovery towards the end of 2021.
- Price-to-Sales Ratio Trend
- Declined initially, then increased significantly post-2018, peaking in late 2020 and remaining high through 2021.
Price to Book Value (P/BV)
Illinois Tool Works Inc., historical P/BV calculation (quarterly data)
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 312,926,939 | 313,880,725 | 314,967,814 | 315,882,732 | 316,662,263 | 316,520,261 | 316,163,249 | 315,932,054 | 318,864,237 | 321,406,096 | 323,478,160 | 325,775,111 | 328,108,383 | 331,801,491 | 335,352,977 | 338,762,621 | 341,545,719 | 342,598,985 | 344,149,420 | 345,451,023 | ||||||
| Selected Financial Data (US$) | ||||||||||||||||||||||||||
| Stockholders’ equity attributable to ITW (in millions) | 3,625) | 3,492) | 3,520) | 3,274) | 3,181) | 2,696) | 2,357) | 2,283) | 3,026) | 2,966) | 3,091) | 3,196) | 3,254) | 3,542) | 3,785) | 4,159) | 4,585) | 5,023) | 4,771) | 4,493) | ||||||
| Book value per share (BVPS)2 | 11.58 | 11.13 | 11.18 | 10.36 | 10.05 | 8.52 | 7.46 | 7.23 | 9.49 | 9.23 | 9.56 | 9.81 | 9.92 | 10.68 | 11.29 | 12.28 | 13.42 | 14.66 | 13.86 | 13.01 | ||||||
| Share price1, 3 | 217.72 | 227.87 | 226.98 | 237.06 | 200.98 | 195.88 | 187.95 | 161.01 | 187.86 | 169.94 | 151.67 | 157.41 | 144.21 | 129.47 | 139.55 | 145.47 | 163.36 | 159.06 | 142.88 | 139.60 | ||||||
| Valuation Ratio | ||||||||||||||||||||||||||
| P/BV ratio4 | 18.79 | 20.48 | 20.31 | 22.87 | 20.01 | 23.00 | 25.21 | 22.28 | 19.80 | 18.42 | 15.87 | 16.05 | 14.54 | 12.13 | 12.36 | 11.85 | 12.17 | 10.85 | 10.31 | 10.73 | ||||||
| Benchmarks | ||||||||||||||||||||||||||
| P/BV Ratio, Competitors5 | ||||||||||||||||||||||||||
| Boeing Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Caterpillar Inc. | 6.62 | 6.61 | 6.65 | 7.86 | 7.20 | 5.64 | 5.32 | 4.11 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Eaton Corp. plc | 3.63 | 4.28 | 4.21 | 3.84 | 3.54 | 3.06 | 2.73 | 2.34 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| GE Aerospace | 2.64 | 3.15 | 3.43 | 3.53 | 2.89 | 1.95 | 1.71 | 1.63 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Honeywell International Inc. | 6.91 | 8.39 | 8.83 | 8.67 | 8.07 | 6.40 | 5.78 | 5.46 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Lockheed Martin Corp. | 9.62 | 9.50 | 15.63 | 17.05 | 15.27 | 20.84 | 27.96 | 30.96 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| RTX Corp. | 1.95 | 1.87 | 1.87 | 1.75 | 1.53 | 1.26 | 1.35 | 1.25 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Data adjusted for splits and stock dividends.
2 Q4 2021 Calculation
BVPS = Stockholders’ equity attributable to ITW ÷ No. shares of common stock outstanding
= 3,625,000,000 ÷ 312,926,939 = 11.58
3 Closing price as at the filing date of Illinois Tool Works Inc. Quarterly or Annual Report.
4 Q4 2021 Calculation
P/BV ratio = Share price ÷ BVPS
= 217.72 ÷ 11.58 = 18.79
5 Click competitor name to see calculations.
The analysis of the financial data reveals several noteworthy trends in the share price, book value per share, and the price-to-book value ratio over the period from the first quarter of 2017 through the fourth quarter of 2021.
- Share Price
- The share price shows an overall upward trend with some fluctuations. Starting at $139.60 in March 2017, the price generally increased, reaching a peak of approximately $237.06 in March 2021. There are notable dips observed, particularly in early 2020 where the price dropped from roughly $187.86 in December 2019 to $161.01 in March 2020, likely reflecting broader market conditions. After this decline, the share price recovered and continued to rise, though it experienced a slight decrease toward the end of 2021, settling at $217.72 in December 2021.
- Book Value Per Share (BVPS)
- BVS shows a declining and then recovering pattern. Initially, it decreased from $13.01 in March 2017 to a low of about $7.23 in March 2020. This decline indicates a reduction in the company's net asset value per share over the period, possibly due to share buybacks, losses, or other equity adjustments. Post-March 2020, BVPS demonstrates a recovery trend, rising to $11.58 by December 2021, which suggests improvement in the company’s net asset base or reduced share count.
- Price-to-Book Value Ratio (P/BV)
- The P/BV ratio exhibits a consistent upward trajectory, reflecting increasing market valuation relative to the book value per share. Starting at 10.73 in March 2017, it escalated significantly, peaking at 25.21 in June 2020. This increase emphasizes that the market price grew disproportionately compared to the book value per share, indicating heightened investor confidence or expectations for future earnings growth. Following its peak, the ratio decreased modestly but remained elevated at 18.79 by December 2021.
In summary, while the book value per share experienced a downward movement initially, it began to recover from early 2020 onward. The share price showed resilience and an overall growth pattern, with short-term declines correlating with external market conditions. The pronounced increase in the price-to-book value ratio across the period indicates a market progressively valuing the company's shares at a premium relative to its book equity, which may point to strong investor sentiment or growth prospects.