Assessing ITT's Valuation After Analyst Upgrades and Strengthening Earnings Outlook

If you’ve got ITT (NYSE:ITT) on your watchlist, Zacks Investment Research just gave investors something to consider. The firm recently highlighted ITT as a top pick in the growth stock category, pointing to strong earnings momentum and a Growth Score that sets it apart from peers. Factoring in upward revisions in earnings estimates, there is now a growing sense that ITT’s fundamentals could drive shares higher over the next year, leading many to rethink their stance on the stock.

Looking at the bigger picture, ITT has built up a steady track record, with the stock moving up 25% in the past year and climbing 20% so far this year. Momentum has been especially strong over the past few months, fueling optimism among investors interested in industrial growth. While ITT’s recent quarterly results and earnings outlook have kept buyers engaged, it is also worth noting that revenue and net income have shown consistent annual gains.

The central question now, after this run, is whether ITT’s valuation remains attractive or if the market has already factored in all the good news about future growth prospects.

Most Popular Narrative: 7.3% Undervalued

According to community narrative, ITT is trading below its estimated fair value, suggesting potential upside based on forward-looking analyst assumptions and growth projections. The fair value was calculated using a discount rate of 8.13%, considering expected improvements in the company’s financial performance and the sustainability of returns over time.

Expansion of high-margin aftermarket and services business, along with new technologies (geopolymer brake pads, advanced fuel pumps, digital monitoring), positions ITT to benefit from industry digitalization and energy efficiency standards. This supports margin expansion and stable, recurring earnings streams.

Interested in the full growth story behind ITT’s perceived undervaluation? The driving logic within this narrative focuses on ambitious financial improvements and transformative business shifts. Looking to uncover the specific profit, revenue, and multiple assumptions that shape this notable discount? The numbers may be revealing.

Result: Fair Value of $184.42 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, growing reliance on large projects and the risk of integration challenges from recent acquisitions could quickly change ITT’s trajectory if conditions shift.

Find out about the key risks to this ITT narrative.

Another View: What Does the SWS DCF Model Say?

While the first estimate relies on comparing ITT's valuation to the market standard, our DCF model takes a different approach and suggests the stock is also trading below fair value. Does this reinforce the bullish case, or are both models missing something crucial?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out ITT for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own ITT Narrative

If you see things differently, or want to reach your own conclusions from the numbers, it only takes a few minutes to craft a personal narrative. do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding ITT.

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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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