Illinois Tool Works Inc. (NYSE:ITW) has been assigned $133.33 as a 52-week price target by Thomson Reuters. The price estimate reflects the average of what was collected by the brokerage firm during its First Call which is given so much weight by the market as a de facto standard. For the last one year an average of $5.70 was put together as the company’s Earnings per share. For the company’s upcoming quarter, a projection on earnings was given by the same analysts to the tune of $1.59. However, the company’s ongoing year had $6.17 but the underway quarter was $N/A. Next year’s earnings per share were at a projection of $6.83.
Valuation Estimates
The use of price/earnings ratio or P/E ratio can be used in the computation of the current valuation of Illinois Tool Works Inc. Common. P/E ratio also takes precedence in stock evaluation, which is based on relative expense. Dividing the existing price of a stock with its earnings per share gives the P/E ratio. This method is what was used to get the company’s P/E ratio, which came in at 22.70. The company’s price to EPS estimate for the next year is at 18.94. The present year has a Price to EPS estimate of 20.97.
It is not necessarily that investors must use P/E ratio to measure a company. Evaluation of Price/Earnings Growth ratio or PEG ratio is also applicable. The presence of a low PEG ratio is a clear indication that the stock’s price is trading lower than its earnings growth capacity. The stock is valued higher than its earnings growth potential but only if there is a high PEG ratio. The company’s upcoming three to five years have a PEG ratio of 2.24. The price to book ratio of the company is 10.48 but the book value is at $12.21 while 3.28 represents the price to sales ratio.
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