BofA Raises ITW Price Target as Margins Reach Record Levels

Core Viewpoint - Illinois Tool Works Inc. (NYSE:ITW) is recognized for its strong financial performance and is included among high-quality dividend stocks for long-term investors [1] Financial Performance - In Q3 2025, Illinois Tool Works reported a record operating margin of 27.4%, an increase of 90 basis points, with enterprise initiatives contributing 140 basis points [3] - Operating cash flow reached $1.0 billion, while free cash flow increased by 15% to $904 million, resulting in a 110% conversion rate relative to net income [3] - For FY25, the company maintained its operating margin guidance of 26% to 27%, with enterprise initiatives expected to contribute 125 basis points for the year [4] Analyst Upgrades - BofA analyst Andrew Obin upgraded Illinois Tool Works to Neutral from Underperform, raising the price target to $255 from $220, citing strong year-over-year margin expansion expected in 2026 [2] Strategic Goals - The company highlighted progress on its strategic growth priorities and reaffirmed its commitment to above-market organic growth driven by customer-backed innovation [3] - Management indicated that the strategy remains on track to meet 2030 performance goals, including a customer-backed innovation yield exceeding 3% [3] Earnings Guidance - Management reiterated confidence in achieving the $10.45 midpoint EPS target for FY25 [4]