Illinois Tool Works Inc. (ITW), a manufacturer of a diversified range of industrial products and equipment, was recently initiated as “Neutral.”
Illinois has grown through its ability to develop new and improved products and numerous acquisitions. Improvisation and development of new methods, processes and equipment along with acquisitions provide the company a big push.
However, immense competitive pressure along with the huge exposure to foreign currency sales puts Illinois at a disadvantage. Illinois’s international operations contributed approximately 59% of revenues in 2008, 56% of revenues in 2007 and 51% of revenues in 2006. Therefore, Illinois is bound to be influenced by foreign currency movements.
Part of Illinois’ businesses serves directly or indirectly – the construction, general industrial, automotive or food institutional/restaurant and service markets. The current global economic crisis has caused downturns in many industrial markets and severe downturns in several markets, including the construction and automotive markets. There can be no assurance as to when economic conditions will improve. An unexpected sustained downturn in one or more of these markets could have a material adverse impact on the company’s business in the upcoming years.
Illinois’s 80/20 business strategy helps focus on the key parts of its trade. The basic concept of this strategy is focusing on what is most important (20% of the items, which account for 80% of the value) and to spend less time and resources on the less important (80% of the items, which account for 20% of the value).
Read the full analyst report on “ITW”
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