Core Viewpoint - Growth investors are increasingly focusing on stocks with above-average financial growth, and identifying such stocks can be challenging due to inherent volatility and risks [1] Group 1: Company Overview - ITT is currently recommended as a growth stock by the Zacks Growth Style Score system, which evaluates a company's real growth prospects beyond traditional metrics [2] - ITT holds a favorable Growth Score and a top Zacks Rank, indicating strong potential for growth [2] Group 2: Earnings Growth - ITT has a historical EPS growth rate of 14.8%, with projected EPS growth of 10.1% for the current year, surpassing the industry average of 8.6% [5] Group 3: Cash Flow Growth - ITT's year-over-year cash flow growth stands at 14.7%, significantly higher than the industry average of -9.3%, highlighting its strong cash accumulation capabilities [6] - The company's annualized cash flow growth rate over the past 3-5 years is 6.6%, compared to the industry average of 5.3% [7] Group 4: Earnings Estimate Revisions - There has been a positive trend in earnings estimate revisions for ITT, with the Zacks Consensus Estimate for the current year increasing by 0.9% over the past month [8] Group 5: Investment Positioning - ITT has achieved a Zacks Rank of 2 and a Growth Score of B, positioning it well for potential outperformance in the growth stock category [10]

Core Insights - Marubeni Corp. (MARUY) has a stronger Zacks Rank of 1 (Strong Buy) compared to ITT's Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision trend for MARUY [3] - Value investors are encouraged to consider various valuation metrics to assess whether a company is undervalued at its current share price levels [3][4] Valuation Metrics - MARUY has a forward P/E ratio of 9.19, significantly lower than ITT's forward P/E of 25.42, suggesting that MARUY may be undervalued [5] - The PEG ratio for MARUY is 1.42, while ITT's PEG ratio is 2.06, indicating that MARUY has a better balance between its price and expected earnings growth [5] - MARUY's P/B ratio stands at 1.35, compared to ITT's P/B of 4.99, further supporting the notion that MARUY is more attractively valued [6] Conclusion - Given the stronger estimate revision activity and more favorable valuation metrics, MARUY is positioned as the superior option for value investors compared to ITT [7]

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market engagement and confidence [1] - The Zacks Style Scores are designed to complement the Zacks Rank, aiding investors in selecting stocks likely to outperform the market in the short term [2] Zacks Style Scores Overview - Stocks are rated A, B, C, D, or F based on value, growth, and momentum characteristics, with higher scores indicating better performance potential [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score [3][4][5][6] Value Score - Focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [3] Growth Score - Concentrates on a company's financial health and future growth potential, analyzing projected and historical earnings, sales, and cash flow [4] Momentum Score - Targets stocks with upward or downward trends in price or earnings, utilizing factors like one-week price change and monthly earnings estimate changes [5] VGM Score - Combines all three Style Scores to provide a comprehensive rating, highlighting stocks with attractive value, strong growth forecasts, and promising momentum [6] Zacks Rank Integration - The Zacks Rank leverages earnings estimate revisions to guide investors, with 1 (Strong Buy) stocks historically yielding an average annual return of +23.75% since 1988, outperforming the S&P 500 [7] - A significant number of stocks can hold a Strong Buy or Buy rank, making the Style Scores essential for narrowing down investment choices [8] Investment Strategy - For optimal returns, investors should consider stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [9] - Stocks with lower ranks but high Style Scores may still present risks due to declining earnings forecasts [10] Company Spotlight: ITT Inc. - ITT Inc., based in New York City, is a leader in high-technology engineering and manufacturing, holding a Zacks Rank of 2 (Buy) and a VGM Score of B [11] - The company has seen a 1.8% increase in shares over the past four weeks, with three analysts raising earnings estimates for fiscal 2025, resulting in a Zacks Consensus Estimate of $6.45 per share [12]

Core Insights - ITT Inc. reported adjusted earnings of $1.64 per share for Q2 2025, exceeding the Zacks Consensus Estimate of $1.62, marking a 10.1% year-over-year increase driven by sales growth in the Connect & Control Technologies segment [1][9] - Total revenues reached $972 million, surpassing the consensus estimate of $947 million, with a year-over-year growth of 7.3% [2][9] Segment Performance - The Industrial Process segment generated revenues of $355.9 million, up 7.6% year-over-year, with organic sales increasing by 5.5% and adjusted operating income rising by 12.6% [3] - The Motion Technologies segment reported revenues of $365.7 million, a decrease of 4.9% year-over-year due to the Wolverine divestiture, although organic revenues increased by 3% [4] - Revenues from the Connect & Control Technologies segment were $251.9 million, reflecting a 31.3% year-over-year increase, with adjusted operating income rising by 24.9% [5] Financial Metrics - ITT's cost of revenues increased by 6.2% year-over-year to $625.6 million, while gross profit rose by 9.5% to $346.8 million [6] - Adjusted operating income increased by 9.2% year-over-year to $179.0 million, with a margin expansion of 30 basis points to 18.4% [6] Balance Sheet and Cash Flow - As of the end of Q2 2025, ITT had cash and cash equivalents of $467.9 million, up from $439.3 million at the end of Q4 2024 [7] - In the first half of 2025, ITT generated net cash of $267.1 million from operating activities, an increase from $215.5 million in the prior year, with free cash flow reaching $213.9 million [8] 2025 Outlook - ITT raised its 2025 adjusted earnings guidance to a range of $6.35-$6.55 per share, indicating an 8-11% increase from the previous year [11] - Revenue growth is projected between 5-7%, with an adjusted operating margin estimated between 18.1% and 18.7% [12]

Core Insights - ITT reported adjusted earnings per share of $1.64, exceeding the analyst forecast of $1.61, and revenue of $972.4 million, surpassing the consensus estimate of $948.47 million [1][2] - Orders exceeded $1 billion, resulting in a backlog of nearly $2 billion at the end of the quarter, indicating strong demand and growth across all major segments [1][5][8] Financial Performance - Adjusted EPS increased by 10.1% year-over-year, while revenue grew by 7.3% [2][5] - Operating margin improved to 18.0%, with company-wide operating income rising nearly 10% [2][7] - Free cash flow reached $137.3 million, a 2.1% increase from the previous year [2][9] Segment Performance - Motion Technologies reported sales of $365.7 million, a 4.9% decline, but showed organic growth of 3.0% [6] - Industrial Process generated $355.9 million in revenue, up 7.6% reported and 5.5% organically [6] - Connect & Control Technologies saw a 31.3% increase in sales to $251.9 million, with organic growth of 4.5% [6] Strategic Focus - ITT is focusing on global diversification and expanding in high-growth markets, with consistent investment in R&D [4] - Recent innovations include energy-saving industrial motor drives and targeted acquisitions to enhance exposure to aerospace and sustainability-linked markets [4] Future Outlook - Management raised full-year revenue guidance to a 5-7% increase, with adjusted EPS expected to be between $6.35 and $6.55, reflecting year-over-year growth of 8-11% [10] - Free cash flow is projected to be in the $450-500 million range, accounting for 12-13% of revenue [10] - Investors should monitor segment-level margin improvements, order trends, and the impact of tariff-related cost increases [11]

Core Insights - ITT reported revenue of $972.4 million for the quarter ended June 2025, reflecting a 7.3% increase year-over-year and surpassing the Zacks Consensus Estimate of $946.88 million by 2.7% [1] - Earnings per share (EPS) for the quarter was $1.64, up from $1.49 in the same quarter last year, with a surprise of 1.23% compared to the consensus estimate of $1.62 [1] Revenue Performance - Motion Technologies (MT) revenue was $365.7 million, exceeding the average estimate of $361.86 million, but showing a year-over-year decline of 4.9% [4] - Connect & Control Technologies (CCT) revenue reached $251.9 million, significantly above the average estimate of $236.64 million, marking a year-over-year increase of 31.3% [4] - Industrial Process (IP) revenue was reported at $355.9 million, slightly above the average estimate of $348.57 million, with a year-over-year growth of 7.6% [4] Adjusted Operating Income - Adjusted Operating Income for Corporate was reported at -$17.4 million, compared to the average estimate of -$16.66 million [4] - Adjusted Operating Income for Connect & Control Technologies (CCT) was $45.1 million, exceeding the average estimate of $44.06 million [4] - Adjusted Operating Income for Motion Technologies (MT) was $73.8 million, above the average estimate of $70.92 million [4] - Adjusted Operating Income for Industrial Process (IP) was $77.5 million, surpassing the average estimate of $75.69 million [4] Stock Performance - ITT shares have returned -0.4% over the past month, while the Zacks S&P 500 composite has increased by 2.7% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Financial Data and Key Metrics Changes - In Q2 2025, the company reported $1 billion in orders, a 16% increase overall and a 13% increase organically, driven by strong performance across all businesses and acquisitions [7] - Quarterly revenue exceeded $970 million, up 7% overall and 4% organically, with all segments contributing [7] - Operating income grew more than twice the organic sales growth rate, and operating margin expanded over 100 basis points excluding M&A impacts [7] - Adjusted EPS grew by 10% or 16% when excluding the WorldVerlin divestiture [8] - Free cash flow reached $214 million year-to-date, with a free cash flow margin of 14% in Q2 [9] Business Line Data and Key Metrics Changes - Industrial Process (IP) orders grew by 22%, with notable strength in Gulps Pumps and Svanohoi, where orders exceeded their full year 2024 revenue in the first half of 2025 [10] - Connect and Control (CCT) saw a 9% organic growth driven by Defense and Commercial Aerospace, with total orders increasing by 36% [11] - Motion Technologies (MT) Friction team won 49 new electrified platform awards, with Friction OE growing 7% organically [12][13] - IP revenue grew 5% organically, while CCT grew 4% organically, and MT Friction OE outperformed global auto production by over 500 basis points [24][26] Market Data and Key Metrics Changes - The company reported a book-to-bill ratio of 1.1, resulting in an ending backlog of nearly $2 billion, up 34% year-over-year and 9% sequentially [13] - The automotive market production was up 2.6% in Q2, with expectations for the full year to be flat or slightly positive [42] - The company outperformed in all three regions (Europe, China, North America) and across all powertrain types (internal combustion, hybrid, EV) [43] Company Strategy and Development Direction - The company focuses on organic growth and margin expansion, complemented by M&A activities [6] - The 2030 financial targets include more than 5% organic revenue growth and approximately 10% total growth annually, with margins expected to reach 23% [22] - The company is actively pursuing acquisition targets, with a disciplined framework for deal selection and integration [21][82] Management's Comments on Operating Environment and Future Outlook - Management raised the full-year adjusted EPS outlook to $6.45, reflecting strong first-half performance and improved visibility for the second half [16][31] - The company expects continued growth in the Project business in IP, firm demand in Aerospace and Defense, and outperformance in Friction OE and Rail [31] - Management noted that the funnel remains healthy, with only minor shifts in order timing, indicating confidence in future performance [40] Other Important Information - The company repurchased $500 million of shares year-to-date, reducing the weighted average share count by 3% [9] - The estimated gross tariff costs for 2025 have been reduced to approximately $25 million, half of the previous estimate, with no material impact expected [32][122] Q&A Session Summary Question: Thoughts on capital equipment and project hesitancy - Management noted strong order performance with only minor shifts in timing, indicating no major concerns in the market [39][40] Question: Auto landscape outlook - The automotive production forecast for 2025 is slightly positive, with the company outperforming across all regions and powertrain types [42][43] Question: CCT orders and market growth - CCT orders grew significantly, driven by aerospace and defense, with strong share gains noted [52][54] Question: FX impact on Motion Technologies margins - The depreciation of the dollar against the euro has negatively impacted transaction margins, despite positive translation effects [56] Question: Strength in Svanahoy business - The outperformance is attributed to strong execution and product differentiation, with expectations for continued growth [63][65] Question: Pricing actions and tariff exposure - The company has successfully mitigated tariff impacts through pricing and productivity actions, with no material income impact expected [122]

Financial Data and Key Metrics Changes - In Q2 2025, the company reported $1 billion in orders, a 16% increase overall and a 13% increase organically, driven by strong performance across all businesses and acquisitions [7] - Quarterly revenue exceeded $970 million, reflecting a 7% total increase and a 4% organic increase, with all segments contributing [7][22] - Operating income grew more than twice the organic sales growth rate, and operating margin expanded over 100 basis points, excluding M&A impacts [7][13] - Adjusted EPS grew by 10% year-over-year, or 16% when excluding the impact of the WorldVerlin divestiture [7][25] - Free cash flow reached $214 million year-to-date, with a free cash flow margin of 14% in Q2 [7][26] Business Line Data and Key Metrics Changes - Industrial Process (IP) orders grew by 22%, with notable strength in Gulps Pumps and Svanohoi, where orders exceeded their full year 2024 revenue in the first half of 2025 [9][12] - Connect and Control (CCT) saw a 9% organic growth driven by Defense and Commercial Aerospace, with total orders increasing by 36% [10][22] - Motion Technologies (MT) reported a 7% organic growth, outperforming global auto production by over 500 basis points [24][12] - Overall, the company achieved a book-to-bill ratio of 1.1, resulting in an ending backlog of nearly $2 billion, up 34% year-over-year [12] Market Data and Key Metrics Changes - The automotive market showed a production increase of 2.6% in Q2, with expectations for the full year to be flat or slightly positive at around 90 million vehicles produced [41] - The company outperformed in all regions, including significant gains in China, Europe, and North America [42] Company Strategy and Development Direction - The company focuses on organic growth and margin expansion, complemented by strategic M&A activities [6][15] - The long-term financial targets include over 5% organic revenue growth and approximately 10% total growth annually, with margins expected to reach 23% by 2030 [20] - The company is actively pursuing acquisition targets, particularly in the $200 million to $400 million revenue range, to enhance its market position [76] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong performance and raised the full-year adjusted EPS outlook to $6.45, reflecting a 10% growth compared to the previous year [15][30] - The company anticipates continued growth in the Project business, firm demand in Aerospace and Defense, and outperformance in Friction OE and Rail for the second half of the year [29] - Management noted that the economic environment remains less volatile, contributing to improved visibility for the second half of 2025 [29] Other Important Information - The company repurchased $500 million of its shares year-to-date, reducing the weighted average share count by 3% [8][26] - The company expects to deliver close to $500 million in free cash flow for the year, supported by strong operating income and improved working capital management [30] Q&A Session Summary Question: Thoughts on capital equipment and project hesitancy - Management noted strong order performance with only minor shifts in timing, indicating a healthy market environment [37][39] Question: Auto landscape outlook - The company expects flat or slightly positive production for the year, with significant outperformance across all regions and powertrains [41][42] Question: CCT orders growth and market share - CCT orders grew significantly, driven by defense and aerospace, with strong share gains noted [51][52] Question: FX impact on Motion Technologies margins - The depreciation of the dollar against the euro has created transaction impacts affecting margins, but overall performance remains strong [54] Question: Performance of Svanahoy - Svanahoy is expected to grow orders by over 20% for the full year, with strong execution and product differentiation driving success [62] Question: Pricing actions and tariff exposure - The company has reduced its tariff exposure estimate for 2025 and is implementing pricing actions to mitigate impacts [115][117] Question: M&A environment and deal activity - The company sees a fragmented market with opportunities for further acquisitions, particularly in flow-related sectors [120][121]

Group 1: Earnings Performance - ITT reported quarterly earnings of $1.64 per share, exceeding the Zacks Consensus Estimate of $1.62 per share, and up from $1.49 per share a year ago [1] - The earnings surprise for the quarter was +1.23%, following a previous surprise of +0.69% with earnings of $1.45 per share against an expectation of $1.44 [2] - Over the last four quarters, ITT has consistently surpassed consensus EPS estimates [2] Group 2: Revenue Performance - ITT's revenues for the quarter ended June 2025 were $972.4 million, surpassing the Zacks Consensus Estimate by 2.70% and up from $905.9 million year-over-year [3] - The company has exceeded consensus revenue estimates three times in the last four quarters [3] Group 3: Stock Performance and Outlook - ITT shares have increased approximately 11.7% since the beginning of the year, outperforming the S&P 500's gain of 8.2% [4] - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $1.65 for the coming quarter and $6.43 for the current fiscal year [5][8] - The Zacks Rank for ITT is currently 2 (Buy), indicating expectations for the stock to outperform the market in the near future [7] Group 4: Industry Context - The Diversified Operations industry, to which ITT belongs, is currently ranked in the top 36% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [9] - Research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [9]

Financial Performance Highlights - ITT reported over $1 billion in orders for the second consecutive quarter, driven by share gains[7] - The company is raising its full-year adjusted EPS midpoint by 15 cents to $6.45, a 10% increase compared to the previous year[7] - Q2 2025 adjusted EPS grew by 10%[8] - Year-to-date free cash flow reached $214 million, a 30% increase compared to the previous year[9] Growth Metrics - Organic orders grew by 13% in Q2 2025, while total orders grew by 16%[8] - Organic revenue growth was 4%, with total revenue growth at 7%[8] - IP organic growth was 22%, with pump projects showing a 62% increase[9] - CCT organic growth was 9%, driven by defense and aerospace awards[9] Margin and Profitability - The adjusted operating margin was 18.4%, representing a 30 bps expansion[8] - IP adjusted operating margin was 21.8%, a 100 bps increase[9] - MT adjusted operating margin was 20.2%, a 140 bps increase[9] - CCT adjusted operating margin increased by 270 bps excluding acquisition dilution[9] Capital Deployment - ITT repurchased $500 million of its own shares year-to-date, reducing the share count by 3%[9] - The company expects to generate $0.5 billion of full-year free cash flow[9] Guidance and Targets - The company is raising its 2025 revenue growth guidance to +5% to +7%, with organic growth expected to be +3% to +5%[24] - ITT is targeting revenue growth of >5% CAGR for its base business and ~10% CAGR with compounding M&A by 2030[11] - The company is aiming for an adjusted EPS of >$11 for the base business and >$12 with M&A by 2030[11]