Illinois Tool Works to Record Considerable Margin Expansion in 2026, BofA Says

MT Newswires Live11-18

Illinois Tool Works (ITW) is likely to record considerable margin expansion in 2026, which is expected to drive stable EPS growth during the year and in 2027, BofA Securities said in a Tuesday research note.

Following prolonged organic growth headwinds from residential and auto-focused markets, the company is expected to deliver better growth in 2026, with a focus on recovering cyclical industries, according to the note.

The company screens as relatively cheap, and has best-in-class margins and return profile. However, organic growth could continue to lag peers, given its high exposure to residential construction, consumer, and autos, according to BofA.

While the brokerage modeled below-peer organic growth in 2026, it raised its EPS estimate to $11.31. For 2027, BofA analysts model EPS growth of over 10%.

BofA said it upgraded the stock to neutral from underperform and raised its price target to $255 per share from $220.

Price: 241.14, Change: -0.27, Percent Change: -0.11

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