September 18, 2025 Shown: Svanehøj NCM, a new compact and versatile marine engine room pump. 1 Safe Harbor and Non-GAAP Disclosures D.A. Davidson Diversified Industrials & Services Conference Safe Harbor This presentation contains "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. In addition, the accompanying conference call may include, and officers and representatives of ITT may from time to time make an ...

Core Viewpoint - Investors are seeking growth stocks that can deliver above-average growth and exceptional returns, but identifying such stocks can be challenging due to their inherent risks and volatility [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score system aids in identifying promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - ITT is currently highlighted as a recommended stock with a favorable Growth Score and a top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is crucial for investors, with double-digit growth being particularly desirable as it indicates strong future prospects [4] - ITT has a historical EPS growth rate of 14.8%, with projected EPS growth of 10.6% this year, surpassing the industry average of 7.4% [5] Group 3: Cash Flow Growth - Higher-than-average cash flow growth is essential for growth-oriented companies, allowing them to expand without relying on external funding [6] - ITT's year-over-year cash flow growth stands at 14.7%, significantly higher than the industry average of -9.2% [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 - Positive trends in earnings estimate revisions correlate strongly with near-term stock price movements [8] - The current-year earnings estimates for ITT have increased by 1.3% over the past month, indicating a favorable outlook [9] Group 5: Overall Assessment - ITT has achieved a Zacks Rank of 2 and a Growth Score of B, suggesting it is a potential outperformer and a solid choice for growth investors [11]

Core Viewpoint - ITT has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with near-term stock price movements [2][4]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Business Improvement Indicators - Rising earnings estimates and the Zacks rating upgrade for ITT suggest an improvement in the company's underlying business, which could lead to higher stock prices as investors respond positively [5][10]. Earnings Estimate Revisions for ITT - For the fiscal year ending December 2025, ITT is expected to earn $6.48 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 2.1% over the past three months [8]. Zacks Rank System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - The upgrade of ITT to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Group 1 - Zacks Premium offers various tools to help investors make informed decisions, including daily updates on Zacks Rank and Industry Rank, Equity Research reports, and Premium stock screens [1][2] - The Zacks Style Scores are designed to complement the Zacks Rank, rating stocks based on value, growth, and momentum characteristics, which can help investors identify stocks likely to outperform the market in the short term [2][3] Group 2 - Stocks are rated from A to F based on their value, growth, and momentum, with A being the highest score indicating a better chance of outperforming the market [3] - The Value Score focuses on identifying undervalued stocks using financial ratios like P/E and Price/Sales [3] - The Growth Score assesses a company's financial health and future outlook, looking at projected earnings and sales growth [4] - The Momentum Score identifies stocks with favorable price trends, utilizing recent price changes and earnings estimate revisions [5] Group 3 - The VGM Score combines the three Style Scores, providing a comprehensive rating that highlights stocks with attractive value, strong growth potential, and positive momentum [6] - The Zacks Rank model uses earnings estimate revisions to identify stocks, with 1 (Strong Buy) stocks historically achieving an average annual return of +23.75% since 1988, significantly outperforming the S&P 500 [7][9] Group 4 - ITT Inc. is highlighted as a 2 (Buy) stock on the Zacks Rank with a VGM Score of B, indicating strong potential for growth investors [11] - ITT is forecasted to have a year-over-year earnings growth of 10.6% for the current fiscal year, with upward revisions in earnings estimates from analysts [12] - The Zacks Consensus Estimate for ITT's earnings has increased by $0.11 to $6.48 per share, with an average earnings surprise of +1.5% [12]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Group 1: Momentum Style Score - ITT currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The Zacks Rank for ITT is 2 (Buy), suggesting a favorable outlook for the stock [3] - Stocks rated Zacks Rank 1 (Strong Buy) and 2 (Buy) with Style Scores of "A or B" tend to outperform the market over the following month [3] Group 2: Price Performance - ITT shares have increased by 1.57% over the past week, while the Zacks Diversified Operations industry has decreased by 3.45% [5] - Over the past month, ITT's price change is 5.11%, outperforming the industry's 1.56% [5] - In the last quarter, ITT shares rose by 11.73%, and over the past year, they increased by 33.5%, compared to the S&P 500's 11.71% and 19.86% respectively [6] Group 3: Trading Volume - ITT's average 20-day trading volume is 437,079 shares, which serves as a bullish indicator when combined with rising stock prices [7] Group 4: Earnings Outlook - In the past two months, three earnings estimates for ITT have been revised upwards, increasing the consensus estimate from $6.37 to $6.46 [9] - For the next fiscal year, four estimates have moved higher with no downward revisions [9] Group 5: Conclusion - Given the strong momentum indicators and positive earnings outlook, ITT is positioned as a 2 (Buy) stock with a Momentum Score of A, making it a potential candidate for near-term investment [11]

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]