DCF Tool

ITW

Illinois Tool Works, Inc. – All Other Miscellaneous General Purpose Machinery Manufacturing
Illinois Tool Works Inc. (ITW) is a Fortune 200 global multi-industrial manufacturing leader with revenues totaling $12.6 billion in 2020. The company's seven industry-leading segments leverage the unique ITW Business Model to drive solid growth with best-in-class margins and returns in markets where highly innovative, customer-focused solutions are required. ITW's approximately 43,000 dedicated colleagues around the world thrive in the company's decentralized and entrepreneurial culture.
Analysis Results
Intrinsic Value $511.72
Latest Price $235.16
Relative Value 54% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 9.5%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 3.2%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 9.5%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2023 3.8 3.68
2024 4.16 3.91
2025 4.56 4.14
2026 4.99 4.39
2027 5.46 4.66
Terminal Value

Assuming the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 164 billion. This corresponds to a present value of 135 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 20.8 billion. Adding in the terminal value gives a total present value of 156 billion.

There are presently 305.0 million outstanding shares, so the intrinsic value per share is 511.72.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 6,270,000,000
Current Cash 708,000,000
Current Liabilities 4,460,000,000
Current Debt 1,590,000,000
Non-Cash Working Capital (NCWC) 2,692,000,000
Change in NCWC 537,000,000
EBIT 3,790,000,000
Tax Provision 808,000,000
Depreciation and Amortization 410,000,000
Capital Expenditure -412,000,000
Unlevered Free Cash Flow 3,527,935,970
Current Assets 6,374,000,000
Current Cash 1,527,000,000
Current Liabilities 3,470,000,000
Current Debt 778,000,000
Non-Cash Working Capital (NCWC) 2,155,000,000
Change in NCWC 435,000,000
EBIT 3,506,000,000
Tax Provision 632,000,000
Depreciation and Amortization 410,000,000
Capital Expenditure -296,000,000
Unlevered Free Cash Flow 3,388,796,752
Current Assets 6,523,000,000
Current Cash 2,564,000,000
Current Liabilities 2,589,000,000
Current Debt 350,000,000
Non-Cash Working Capital (NCWC) 1,720,000,000
Change in NCWC -402,000,000
EBIT 2,890,000,000
Tax Provision 595,000,000
Depreciation and Amortization 273,000,000
Capital Expenditure -236,000,000
Unlevered Free Cash Flow 1,889,071,745
Current Assets 6,253,000,000
Current Cash 1,981,000,000
Current Liabilities 2,154,000,000
Current Debt 4,000,000
Non-Cash Working Capital (NCWC) 2,122,000,000
Change in NCWC 39,000,000
EBIT 3,402,000,000
Tax Provision 767,000,000
Depreciation and Amortization 267,000,000
Capital Expenditure -326,000,000
Unlevered Free Cash Flow 2,588,406,934
Current Assets 5,778,000,000
Current Cash 1,504,000,000
Current Liabilities 3,542,000,000
Current Debt 1,351,000,000
Non-Cash Working Capital (NCWC) 2,083,000,000
Change in NCWC 102,000,000
EBIT 3,584,000,000
Tax Provision 831,000,000
Depreciation and Amortization 272,000,000
Capital Expenditure -364,000,000
Unlevered Free Cash Flow 2,716,479,670
Current Assets 7,278,000,000
Current Cash 3,094,000,000
Current Liabilities 3,053,000,000
Current Debt 850,000,000
Non-Cash Working Capital (NCWC) 1,981,000,000
Change in NCWC 438,000,000
EBIT 3,399,000,000
Tax Provision 1,583,000,000
Depreciation and Amortization 256,000,000
Capital Expenditure -297,000,000
Unlevered Free Cash Flow 2,150,551,376
Current Assets 6,123,000,000
Current Cash 2,472,000,000
Current Liabilities 2,760,000,000
Current Debt 652,000,000
Non-Cash Working Capital (NCWC) 1,543,000,000
Change in NCWC -245,000,000
EBIT 3,125,000,000
Tax Provision 873,000,000
Depreciation and Amortization 246,000,000
Capital Expenditure -273,000,000
Unlevered Free Cash Flow 1,914,855,226
Current Assets 6,720,000,000
Current Cash 3,090,000,000
Current Liabilities 2,368,000,000
Current Debt 526,000,000
Non-Cash Working Capital (NCWC) 1,788,000,000
Change in NCWC -241,000,000
EBIT 2,865,000,000
Tax Provision 820,000,000
Depreciation and Amortization 244,000,000
Capital Expenditure -284,000,000
Unlevered Free Cash Flow 1,719,969,106
Current Assets 8,076,000,000
Current Cash 3,990,000,000
Current Liabilities 3,533,000,000
Current Debt 1,476,000,000
Non-Cash Working Capital (NCWC) 2,029,000,000
Change in NCWC -1,686,000,000
EBIT 2,882,000,000
Tax Provision 809,000,000
Depreciation and Amortization 262,000,000
Capital Expenditure -361,000,000
Unlevered Free Cash Flow 233,147,462
Current Assets 9,816,000,000
Current Cash 3,618,000,000
Current Liabilities 6,034,000,000
Current Debt 3,551,000,000
Non-Cash Working Capital (NCWC) 3,715,000,000
Change in NCWC 726,000,000
EBIT 2,502,000,000
Tax Provision 717,000,000
Depreciation and Amortization 299,000,000
Capital Expenditure -368,000,000
Unlevered Free Cash Flow 2,394,648,061
Current Assets 7,960,000,000
Current Cash 2,779,000,000
Current Liabilities 2,651,000,000
Current Debt 459,000,000
Non-Cash Working Capital (NCWC) 2,989,000,000
Change in NCWC -207,807,000
EBIT 2,819,000,000
Tax Provision 1,108,000,000
Depreciation and Amortization 323,000,000
Capital Expenditure -382,000,000
Unlevered Free Cash Flow 1,685,289,863

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