Last week saw the newest second-quarter earnings release from Illinois Tool Works Inc. (NYSE:ITW), an important milestone in the company's journey to build a stronger business. The result was positive overall - although revenues of US$4.0b were in line with what the analysts predicted, Illinois Tool Works surprised by delivering a statutory profit of US$2.54 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Following last week's earnings report, Illinois Tool Works' 17 analysts are forecasting 2024 revenues to be US$16.1b, approximately in line with the last 12 months. Statutory per share are forecast to be US$10.33, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$16.3b and earnings per share (EPS) of US$10.34 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of US$248, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Illinois Tool Works analyst has a price target of US$294 per share, while the most pessimistic values it at US$211. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Illinois Tool Works' revenue growth is expected to slow, with the forecast 0.5% annualised growth rate until the end of 2024 being well below the historical 4.5% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.3% annually. Factoring in the forecast slowdown in growth, it seems obvious that Illinois Tool Works is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Illinois Tool Works' revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Illinois Tool Works analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Illinois Tool Works that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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