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ITT Corporation (ITT)
:ITT
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ITT
(NYSE:ITT)78Outperform
Positive Factors
Earnings Growth
ITT is on pace to put up its 4th straight year of double-digit EPS growth.
M&A Strategy
M&A action improves the quality/exposure/TAM of the company and ultimately will drive robust core earnings power.
Negative Factors
Auto Market Weakness
Auto production, which accounts for nearly 30% of sales, is weak.
ITT (ITT) vs. S&P 500 (SPY)
Market Cap
$10.93B
Dividend Yield0.93%
Average Volume (3M)423.90K
Price to Earnings (P/E)21.3
Beta (1Y)1.45
Revenue Growth10.59%
EPS Growth27.04%
CountryUS
Employees11,700
SectorIndustrials
Sector Strength66
IndustryIndustrial Goods
Share Statistics
EPS (TTM)6.30
Shares Outstanding81,400,000
10 Day Avg. Volume517,623
30 Day Avg. Volume423,904
Financial Highlights & Ratios
PEG Ratio0.79
Price to Book (P/B)N/A
Price to Sales (P/S)3.08
Price to Cash Flow (P/CF)12.50
P/FCF Ratio15.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$172.00Price Target Upside28.13% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
ITT Business Overview & Revenue Model
Company DescriptionITT, Inc. engages in the manufacture and sale of engineered components and customized technology solutions in the field of energy, transportation, and industrial markets. It operates through the following segments: Motion Technologies, Industrial Process, and Connect and Control Technologies. The Motion Technologies segment manufactures brake components and specialized sealing solutions, shock absorbers and damping technologies primarily for the global automotive, truck and trailer, public bus and rail transportation. The Industrial Process segment includes engineered fluid process equipment in areas such as chemical, oil and gas, mining, and other industrial process markets as well as providing of plant optimization and efficiency solutions and aftermarket services and parts. The Connect and Control Technologies segment offers harsh-environment connector solutions and critical energy absorption and flow control components for the aerospace and defense, general industrial, medical, and oil and gas markets. The company was founded in 1920 and is headquartered in White Plains, NY.
How the Company Makes MoneyITT Inc. generates revenue through the sale of its diverse range of products and services across its three main business segments. In the Industrial Process segment, ITT offers pumps, valves, and monitoring and control systems for the oil and gas, chemical, and industrial markets. The Motion Technologies segment provides highly engineered components such as brake pads, shock absorbers, and other friction materials primarily for the automotive and rail industries. The Connect and Control Technologies segment supplies connectors and control devices for applications in aerospace, defense, and industrial markets. Key revenue streams include direct sales to industrial and commercial customers, long-term contracts, and aftermarket services. The company also benefits from strategic partnerships and a robust global supply chain that enhances its market reach and operational efficiency.
ITT Financial Statement Overview
Summary
ITT exhibits strong financial performance with robust revenue and profit growth, efficient cost management, and a solid balance sheet with low leverage. The company generates positive cash flows, ensuring operational stability and supporting future growth prospects. While there are minor fluctuations in cash flows, overall financial health is robust.Income Statement
The income statement reveals strong revenue growth with a significant increase of 10.6% from 2023 to 2024. Gross profit margin stands at 34.35%, indicating efficient cost management. The net profit margin improved to 14.27%, showcasing enhanced profitability. EBIT and EBITDA margins are robust at 18.62% and also reflect the company's effective operational management.85
Very Positive
Balance Sheet
The balance sheet indicates solid financial health with a low debt-to-equity ratio of 0.15, suggesting low financial leverage. Return on Equity (ROE) is healthy at 18.75%, reflecting good profitability from equity. Equity ratio at 58.64% highlights a strong asset base funded by equity. Overall, the company maintains a stable financial position with manageable debt levels.78
Positive
Cash Flow
Cash flow statements show positive trends with a free cash flow growth rate of 1.99%. Operating cash flow to net income ratio of 1.09 demonstrates effective cash generation relative to earnings. The free cash flow to net income ratio is also favorable at 0.85, indicating sound cash management. Despite some fluctuations, the cash flow position remains stable.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.63B | 3.28B | 2.99B | 2.77B | 2.48B | Gross Profit |
| 1.25B | 1.11B | 922.30M | 899.50M | 782.20M | EBIT |
| 676.00M | 528.20M | 468.00M | 504.30M | 226.50M | EBITDA |
| 821.50M | 639.10M | 554.50M | 545.60M | 455.00M | Net Income Common Stockholders |
| 518.30M | 410.50M | 367.00M | 316.30M | 72.50M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 439.30M | 489.20M | 561.20M | 647.50M | 859.80M | Total Assets |
| 4.71B | 3.93B | 3.78B | 3.57B | 4.28B | Total Debt |
| 427.60M | 285.20M | 517.60M | 197.60M | 106.80M | Net Debt |
| -11.70M | -204.00M | -43.60M | -449.90M | -753.00M | Total Liabilities |
| 1.94B | 1.39B | 1.52B | 1.33B | 2.15B | Stockholders Equity |
| 2.76B | 2.53B | 2.25B | 2.23B | 2.13B |
| Cash Flow | Free Cash Flow | |||
| 438.20M | 430.10M | 173.90M | -96.00M | 373.20M | Operating Cash Flow |
| 562.10M | 537.70M | 277.80M | -7.60M | 436.90M | Investing Cash Flow |
| -817.90M | -181.00M | -255.10M | -82.30M | -65.80M | Financing Cash Flow |
| 234.90M | -432.30M | -83.30M | -99.80M | -158.60M |
ITT Technical Analysis
Negative
134.24
Price Trends
145.31
Negative
148.09
Negative
141.45
Negative
Market Momentum
-2.60
Positive
29.68
Positive
15.46
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ITT, the sentiment is Negative. The current price of 134.24 is below the 20-day moving average (MA) of 144.59, below the 50-day MA of 145.31, and below the 200-day MA of 141.45, indicating a bearish trend. The MACD of -2.60 indicates Positive momentum. The RSI at 29.68 is Positive, neither overbought nor oversold. The STOCH value of 15.46 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ITT.
ITT Risk Analysis
ITT disclosed 19 risk factors in its most recent earnings report. ITT reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
ITT Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $10.93B | 21.32 | 19.60% | 0.93% | 10.59% | 27.04% | |
77 Outperform | $25.26B | 9.47 | 38.79% | 1.06% | -2.99% | 159.26% | |
75 Outperform | $80.47B | 25.85 | 24.08% | 1.00% | 0.41% | 19.76% | |
74 Outperform | $64.30B | 27.12 | 9.14% | 1.80% | 10.29% | 22.72% | |
68 Neutral | $6.95B | 24.64 | 14.08% | 1.59% | 5.49% | 51.02% | |
66 Neutral | $31.51B | 34.67 | 27.22% | 1.84% | -11.28% | -23.69% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
ITT
ITT
134.24
8.13
6.45%
DOV
Dover
184.06
14.97
8.85%
EMR
Emerson Electric Company
114.03
6.18
5.73%
FLS
Flowserve
50.46
8.66
20.72%
PH
Parker Hannifin
624.90
99.18
18.87%
ROK
Rockwell Automation
267.87
-17.96
-6.28%
ITT Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -10.22% | Next Earnings Date: May 2, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth, significant margin expansion, and successful strategic acquisitions leading to increased shareholder value. However, challenges such as the impact of the Wolverine divestiture, higher interest expenses, and temporary amortization effects were noted. Overall, the positive aspects, including strong cash flow and strategic positioning, outweigh the challenges.Highlights
Strong Revenue and Order Growth
Revenue grew by 11% (7% organic), with orders up 10% (5% organic), resulting in a backlog increase of 34% year over year to $1.6 billion.
Significant Margin Expansion
Operating margin expanded by 80 basis points to almost 18%, with MT surpassing 19% and IP eclipsing 21%.
Successful Strategic Acquisitions
Acquisitions of Vanooy and Qesaria contributed to growth, with Vanooy orders up 26%. The company deployed $865 million on acquisitions.
Strong Free Cash Flow and EPS Growth
Generated nearly $440 million of free cash flow and delivered 12% EPS growth.
Performance in Saudi Arabia
Secured more than $30 million in orders on the Riyadh project and continued expansion in the region.
Lowlights
Impact of Wolverine Divestiture
Loss of $50 million in operating income due to the divestiture of Wolverine.
Higher Interest Expenses
Increased interest expenses related to M&A activities affected earnings.
Challenges in Automotive Sector
Global automotive production expected to decline, impacting Motion Technologies.
Temporary Amortization Impact
Temporary intangible amortization from acquisitions affected EPS, with $0.17 impact expected in 2025.
Company Guidance
In the call discussing ITT Inc.'s financial performance and future outlook, the management outlined several key metrics that underscored a strong 2024 and promising guidance for 2025. For 2024, the company reported 10% order growth (5% organic), leading to a backlog of $1.6 billion, which is up 34% year over year. Revenue increased by 11% (7% organic), with an operating margin expansion of 80 basis points to nearly 18%. Free cash flow was nearly $440 million, and EPS grew by 12%. Despite challenges like the Wolverine divestiture and higher interest expenses from acquisitions, ITT Inc. achieved significant margin expansions, with MT margins reaching almost 19% and IP margins nearly 21%. For 2025, the company anticipates revenue exceeding $3.7 billion, 3% to 5% organic growth, and 90 basis points of further margin expansion to 18.6%. EPS is expected to grow 8% at the midpoint, with contributions from acquisitions increasing considerably, and free cash flow projected to be around $475 million. The company is poised for continued above-market organic growth and margin expansion, bolstered by strategic M&A activities.ITT Corporate Events
Executive/Board Changes
ITT Introduces CEO Retention Plan for Luca Savi
Positive
Oct 31, 2024
ITT Inc. has introduced a CEO Retention Plan to honor CEO Luca Savi’s remarkable leadership and ensure his continued presence. The plan, valued at $7 million in restricted stock units, ties Mr. Savi’s compensation to the company’s performance, including shareholder returns and capital management. Since 2019, Savi has significantly boosted ITT’s market cap, revenue, and shareholder returns, underscoring his pivotal role in the company’s growth trajectory.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.