Evaluating ITT (ITT) Valuation Following Upward Earnings Revisions and Strengthened Analyst Outlook

ITT (ITT) has recently drawn attention after upward earnings revisions and higher consensus estimates. These factors suggest the company is positioned for solid cash flow gains. The updates appear to be fueling positive sentiment among investors.

See our latest analysis for ITT.

ITT’s momentum has been building, with robust upward earnings revisions contributing to a 9.6% gain in share price over the past 90 days. While recent days saw some pullback, longer-term investors have enjoyed a 12.4% total return over the past year and an impressive 182% total return over five years. This highlights the stock’s enduring strength and ongoing interest from growth-focused investors.

If ITT’s growth streak has you thinking bigger, it could be the perfect moment to broaden your search and discover fast growing stocks with high insider ownership

With ITT continuing to post solid growth and analyst optimism running high, the big question is whether the current share price offers long-term value for new investors or if market enthusiasm has already accounted for future gains.

Most Popular Narrative: 11.4% Undervalued

ITT's most-followed valuation narrative sets its fair value at $193, which is well above the last close of $170.91. The narrative assumption suggests there is room for upside, hinging on unique tailwinds and specific future milestones for the company.

Operational improvements, such as automation, productivity initiatives, and strategic pricing, combined with visibility from a $2B backlog and resilient end markets, are expected to drive further gains in operating margins, free cash flow conversion, and EPS over the medium and long term.

Read the complete narrative.

Puzzled by how this price was calculated? The secret lies in bullish profit margin forecasts, ambitious share buybacks, and confidence that ITT can consistently outperform its competitors. Wondering which needle-moving assumptions shaped this fair value? Get the full picture inside the complete narrative.

Result: Fair Value of $193 (UNDERVALUED)

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

However, shifting market demand and potential integration challenges from recent acquisitions could present headwinds to ITT's otherwise optimistic outlook.

Find out about the key risks to this ITT narrative.

Another View: How Does ITT's Valuation Stack Up?

Looking through the lens of price-to-earnings, ITT is trading at a ratio of 25.8x, which is higher than the US Machinery industry average of 23.4x and well above its own fair ratio of 23x. This indicates that investors are paying a premium, raising questions about valuation risk if growth slows.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own ITT Narrative

If you see the numbers differently or want to run your own analysis, you can build a custom valuation in just a few minutes, your way with 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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