ITT (ITT): Assessing Valuation After Strong Q3 Results and Upgraded Guidance

ITT (ITT) grabbed attention after releasing strong third-quarter results, beating expectations for both revenue and earnings. The company followed up by raising its full-year financial guidance, which signals continued momentum in its operations.

See our latest analysis for ITT.

ITT’s upbeat results and upgraded guidance are sparking renewed investor confidence, and the share price has responded with a 32.7% gain year to date. With recent acquisitions and quarterly momentum adding fuel, ITT’s three-year total shareholder return of 135% highlights impressive long-term value creation.

If performance like ITT’s has you thinking about other growth stories, now is a great moment to discover fast growing stocks with high insider ownership.

With ITT’s rapid ascent and upgraded outlook, the key question now is whether all this optimism is reflected in the share price or if there is still room for investors to capture further upside from here.

Most Popular Narrative: 8.8% Undervalued

The most-followed narrative sees ITT's fair value at $206.36, compared to a last close price of $188.19, setting up a compelling valuation gap. Here is the thinking that drives this outlook.

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, supporting margin expansion and stable, recurring earnings streams.

Read the complete narrative.

Want to know the financial engine behind this premium? The narrative hinges on ambitious growth assumptions for ITT’s top line, stronger margins, and a future profit multiple that rivals industry leaders. Ready to see which bold forecasts push the story beyond the headlines? Dive deeper to find the numbers that shape this fair value.

Result: Fair Value of $206.36 (UNDERVALUED)

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

However, supply chain challenges and increased project-based revenue could introduce new volatility. This could make ITT’s path to sustained growth less predictable.

Find out about the key risks to this ITT narrative.

Another View: Comparing the Market's Multiple

Looking at ITT’s valuation through the lens of the price-to-earnings ratio offers a different perspective. With a P/E of 30.5x, ITT stands above both the industry average of 23.8x and its fair ratio estimate of 25.4x. This suggests the market is already pricing in a fair amount of optimism. Does this premium leave much room for upside, or does it signal a risk of disappointment 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 things differently or want to dig into the details on your terms, you can easily craft your own perspective in just a few minutes with Do it your way.

A great starting point for your ITT research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.

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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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