6/2/2009
NEWS BRIEFS
Upgrade Boosts ITW Stock

Analysts breathed life into Illinois Tool Works’ stock, which jumped 11% to $35.85 June 1 on the New York Stock Exchange.

Credit Suisse upgraded ITW to “outperform,” saying current levels provide an attractive entry point for investors in “one of the highest quality, shorter cycle industrial names,” Reuters reports.

“With the stock down 52% from the peak of $60, we think it is time to revisit Illinois Tool Works with negative earnings revisions likely behind us,” analyst Jamie Cook wrote.

Cook noted ITW can ramp production quickly when markets turn.

“With restructuring efforts largely behind us and most markets largely stable, we believe operating margins are on an upward trajectory providing a positive catalyst for the stock,” Cook stated.

The upgrade follows a “significant” revenue decline for ITW during the first quarter of 2009, with sales dropping 24% to $2.9 billion. Net results produced a $29.4 million loss compared with a profit of $369.8 million during the first quarter of 2008.

Q1 Transportation segment revenue, including fasteners, dropped 26.8%.

CEO David Speer has promised “aggressive restructuring actions” to help ITW cope with the economic recession.

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