MeritValue

ILLINOIS TOOL WORKS INC

ITWdata completeness 100%19 fiscal years on file
The thesis, from the filings

ILLINOIS TOOL WORKS INC earns about 15% on invested capital, comfortably above its ~9% cost of capital, and has bought back 8% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $107.56 and $172.33 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$14.5B1$15.9B2$16.1B3$15.9B3$16B3
Net income$2.69B4$3.03B5$2.96B6$3.49B6$3.07B6
Operating cash flow$2.56B7$2.35B8$3.54B9$3.28B9$3.13B9
Capital expenditure$296M10$412M11$455M12$437M12$419M12
Free cash flow (derived)$2.26B7$1.94B8$3.08B9$2.84B9$2.71B9
Total debt$16.7B13$17.6B14$19.5B15$16.5B16$18.9B16
Cash & equivalents$1.53B17$708M18$1.07B19$948M20$851M20
Diluted shares316.4M310.7M303.6M297.8M292.3M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$110.37
your share of equity
Profit it earned you last year
$104.89
Free cash flow it threw off
$92.61
Debt you’d be carrying
$647.86

10 shares is a claim on $110.37 of net worth that earned you $104.89 and generated $92.61 of cash last year, against $647.86 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
15% avg · 5y
FY21 15%FY22 16%FY23 15%FY24 —FY25 —

It earned about 15% on invested capital against a ~9% cost of capital — comfortably above the cost of funding, a moderate advantage.

seeing a moat in the numbers →
Management signal · capital allocation
−8% shares · 5y

Share count is down 8% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has risen 13% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $107.56 and $172.33 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$172.33
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth7.9%
  • fcfBase$2.84B
DCF · Growth Exit 5Y
$133.66
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth7.9%
  • fcfBase$2.84B
Earnings Power Value
$107.56
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$3.03B
  • growthAssumed0.0%
Graham Number
$51.04
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years7.9%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $133.66
The three cases
Bear0.0%$77.14
Base7.9%$133.66
Bull12.9%$178.26

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 7.9%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000049826-24-000008 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0000049826-25-000007 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0000049826-26-000008 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0000049826-24-000008 (ProfitLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000049826-25-000007 (ProfitLoss)
  6. 10-K · period ending 2023-12-31 · accession 0000049826-26-000008 (ProfitLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000049826-24-000008 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000049826-25-000007 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0000049826-26-000008 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000049826-24-000008 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0000049826-25-000007 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0000049826-26-000008 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0000049826-23-000008 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-12-31 · accession 0000049826-24-000008 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-12-31 · accession 0000049826-25-000007 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-12-31 · accession 0000049826-26-000008 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2021-12-31 · accession 0000049826-23-000008 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-31 · accession 0000049826-24-000008 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0000049826-25-000007 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-12-31 · accession 0000049826-26-000008 (CashAndCashEquivalentsAtCarryingValue)