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Illinois Tool (ITW) Touches a New 52-Week High of $135.93

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Shares of Illinois Tool Works Inc. (ITW - Free Report) reached a new 52-week high of $135.93 during its trading session on Mar 15. This apex marks an increase from the last 52-week high of $135.24 on Mar 1.

Post the release of fourth-quarter 2016 results on Jan 25, shares of the company yielded 5.36% return, outperforming the gain of 1.18% seen by the Zacks categorized Machinery General Industrial industry.

On Mar 15, Illinois Tool Works closed its trading session at $135.46, yielding year-to-date return of roughly 10.6%. The trading volume for the session was 0.99 million shares. Positive earnings estimate revisions for 2017 and 2018, along with an expected earnings growth rate of 7.5% for the next five years, indicate the stock’s potential for further price appreciation.

Growth Drivers

Illinois Tool Works’ financial performance has been impressive over the last four quarters, as evident from an average positive earnings surprise of 2.20%. In the recently reported fourth-quarter results, the company’s earnings of $1.39 per share surpassed the Zacks Consensus Estimate of $1.37 by 1.46%.

For 2017, Illinois Tool Works anticipates earnings to be within $6.00−$6.20 per share range, up 9% year over year at mid point. Organic revenue will grow 1.5−3.5% while total revenue will likely be $13.8−$14.1 billion. Margin profile will strengthen further on the back of benefits from enterprise initiatives. Also, the company remains committed toward making bolt-on acquisitions for development of its core segments as well as creation of new platforms for expanding its growth opportunities.

In addition, the growth policies of the newly elected U.S. President are likely to work in favor of industrial stocks. Also, a steady month-over-month rise in the U.S. ISM Purchasing Managers Index (PMI) points toward a healthy demand and supply environment, and strong business conditions.

Estimate Revisions Show Potency

Over the last 60 days, the Zacks Consensus Estimate for Illinois Tool Works increased 0.7% to $6.18 for 2017 and 1.8% to $6.90 for 2018. Earnings estimates represent year-over-year growth of 9.5% for 2017 and 11.7% for 2018.

With a market capitalization of $46.9 billion, Illinois Tool Works currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the machinery industry include Parker-Hannifin Corporation (PH - Free Report) , Roper Technologies, Inc. (ROP - Free Report) and Altra Industrial Motion Corp. . While both Parker-Hannifin Corporation and Roper Technologies sport a Zacks Rank #1 (Strong Buy), Altra Industrial Motion carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Parker-Hannifin Corporation’s earnings estimates for fiscal 2017 and fiscal 2018 have been revised upward over the last 60 days. Also, the company has an average positive earnings surprise of 12.44%.

Roper Technologies, Inc. reported better-than-expected results in the last quarter, with a positive earnings surprise of 2.20%. Also, bottom-line expectations for 2017 and 2018 have improved over the last 60 days.

Altra Industrial Motion Corp. reported better-than-expected results in the last four quarters, with an average positive earnings surprise of 12.49%. Also, its earnings estimates for 2017 and 2018 improved in the last 60 days.

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