NYSE:ITT

Stock Analysis Report

Executive Summary

ITT Inc. manufactures and sells engineered critical components and customized technology solutions for the energy, transportation, and industrial markets worldwide.

Rewards

Trading at 28.4% below its fair value

Earnings are forecast to grow 7.44% per year

Risk Analysis

No risks detected for ITT from our risk checks.


Snowflake Analysis

Excellent balance sheet and good value.


Similar Companies

Share Price & News

How has ITT's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ITT has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-8.1%

ITT

-5.6%

US Machinery

-7.4%

US Market


1 Year Return

7.8%

ITT

2.8%

US Machinery

10.5%

US Market

Return vs Industry: ITT exceeded the US Machinery industry which returned 2.8% over the past year.

Return vs Market: ITT underperformed the US Market which returned 10.5% over the past year.


Shareholder returns

ITTIndustryMarket
7 Day-8.1%-5.6%-7.4%
30 Day-10.2%-3.5%-3.6%
90 Day-10.9%-5.4%-0.6%
1 Year8.8%7.8%4.7%2.8%12.8%10.5%
3 Year53.2%48.4%27.5%19.4%37.4%28.6%
5 Year59.8%51.0%55.7%37.3%61.3%43.6%

Price Volatility Vs. Market

How volatile is ITT's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is ITT undervalued compared to its fair value and its price relative to the market?

28.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ITT ($62.82) is trading below our estimate of fair value ($87.75)

Significantly Below Fair Value: ITT is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ITT is good value based on its PE Ratio (17x) compared to the Machinery industry average (21x).

PE vs Market: ITT is good value based on its PE Ratio (17x) compared to the US market (17.2x).


Price to Earnings Growth Ratio

PEG Ratio: ITT is poor value based on its PEG Ratio (2.3x)


Price to Book Ratio

PB vs Industry: ITT is overvalued based on its PB Ratio (2.7x) compared to the US Machinery industry average (2.1x).


Next Steps

Future Growth

How is ITT forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

7.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ITT's forecast earnings growth (7.4% per year) is above the savings rate (1.7%).

Earnings vs Market: ITT's earnings (7.4% per year) are forecast to grow slower than the US market (13.2% per year).

High Growth Earnings: ITT's earnings are forecast to grow, but not significantly.

Revenue vs Market: ITT's revenue (3.8% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: ITT's revenue (3.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ITT's Return on Equity is forecast to be low in 3 years time (17.8%).


Next Steps

Past Performance

How has ITT performed over the past 5 years?

3.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ITT has high quality earnings.

Growing Profit Margin: ITT's current net profit margins (11.4%) are lower than last year (12.1%).


Past Earnings Growth Analysis

Earnings Trend: ITT's earnings have grown by 3.8% per year over the past 5 years.

Accelerating Growth: ITT's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ITT had negative earnings growth (-2.7%) over the past year, making it difficult to compare to the Machinery industry average (0.9%).


Return on Equity

High ROE: ITT's Return on Equity (15.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is ITT's financial position?


Financial Position Analysis

Short Term Liabilities: ITT's short term assets ($1.7B) exceed its short term liabilities ($849.7M).

Long Term Liabilities: ITT's short term assets ($1.7B) exceed its long term liabilities ($1.2B).


Debt to Equity History and Analysis

Debt Level: ITT's debt to equity ratio (4.8%) is considered satisfactory.

Reducing Debt: ITT's debt to equity ratio has increased from 0.1% to 4.8% over the past 5 years.

Debt Coverage: ITT's debt is well covered by operating cash flow (360.8%).

Interest Coverage: ITT earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: ITT has a high level of physical assets or inventory.

Debt Coverage by Assets: ITT's debt is covered by short term assets (assets are 17.5x debt).


Next Steps

Dividend

What is ITT's current dividend yield, its reliability and sustainability?

1.08%

Current Dividend Yield


Dividend Yield vs Market

company1.1%marketbottom25%1.5%markettop25%3.9%industryaverage2.1%forecastin3Years1.1%

Current dividend yield vs market & industry

Notable Dividend: ITT's dividend (1.08%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.52%).

High Dividend: ITT's dividend (1.08%) is low compared to the top 25% of dividend payers in the US market (3.9%).


Stability and Growth of Payments

Stable Dividend: ITT's dividend payments have been volatile in the past 10 years.

Growing Dividend: ITT's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (15.9%), ITT's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ITT's dividends in 3 years are forecast to be well covered by earnings (15.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.3yrs

Average management tenure


CEO

Luca Savi (53yo)

1.1yrs

Tenure

US$3,847,877

Compensation

Mr. Luca Savi is a Director of ITT Inc since January 1, 2019. Mr. Luca Savi was the Chief Operating Officer of ITT Inc. since January 05, 2017 until January 1, 2019 and has been its President since August  ...


CEO Compensation Analysis

Compensation vs Market: Luca's total compensation ($USD3.85M) is below average for companies of similar size in the US market ($USD6.41M).

Compensation vs Earnings: Luca's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Luca Savi
CEO, President & Director1.1yrsUS$3.85mno data
Thomas Scalera
Executive VP & CFO8.3yrsUS$3.27m0.020% $1.2m
Mary Gustafsson
Senior VP6yrsUS$1.82m0.018% $1.1m
Farrokh Batliwala
Senior VP and President of Connect & Control Technologies2.8yrsUS$1.32m0.0072% $420.1k
John Capela
VP & Chief Accounting Officer1.3yrsno datano data
Jessica Kourakos
Head of Investor Relations2.3yrsno datano data
Maurine Lembesis
Chief Human Resources Officer & Senior VP0yrsno data0.0037% $213.0k
Carlo Ghirardo
Senior VP & President of Motion Technologies1.8yrsno datano data
Ryan Flynn
Senior VP & President of Asia Pacific0yrsno datano data
George Hanna
Senior VP & President of Industrial Process0yrsno data0.0097% $568.3k

2.3yrs

Average Tenure

48yo

Average Age

Experienced Management: ITT's management team is considered experienced (2.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Luca Savi
CEO, President & Director1.1yrsUS$3.85mno data
Francis MacInnis
Independent Chairman of the Board8.3yrsUS$325.02k0.061% $3.6m
Donald DeFosset
Independent Director8.3yrsUS$210.03k0.024% $1.4m
Timothy Powers
Independent Director5yrsUS$215.03k0.0088% $511.7k
Rebecca McDonald
Independent Director6.2yrsUS$200.03k0.014% $829.2k
Christina Gold
Independent Director22.2yrsUS$200.03k0.052% $3.0m
Geraud Darnis
Independent Director4.3yrsUS$200.03k0.022% $1.3m
Richard Lavin
Independent Director6.8yrsUS$210.03k0.017% $968.1k
Nicholas Fanandakis
Independent Director3.3yrsUS$200.03k0.0072% $417.2k
Orlando Ashford
Independent Director8.2yrsUS$200.03k0.021% $1.2m

6.5yrs

Average Tenure

67yo

Average Age

Experienced Board: ITT's board of directors are considered experienced (6.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: ITT insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

ITT Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: ITT Inc.
  • Ticker: ITT
  • Exchange: NYSE
  • Founded: 1920
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: US$5.835b
  • Shares outstanding: 87.80m
  • Website: https://www.itt.com

Number of Employees


Location

  • ITT Inc.
  • 1133 Westchester Avenue
  • White Plains
  • New York
  • 10604
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ITTNYSE (New York Stock Exchange)YesNew Common StockUSUSDJan 1968
2IIDB (Deutsche Boerse AG)YesNew Common StockDEEURJan 1968

Biography

ITT Inc. manufactures and sells engineered critical components and customized technology solutions for the energy, transportation, and industrial markets worldwide. The company operates through three segments: Motion Technologies, Industrial Process, and Connect & Control Technologies. The Motion Technologies segment manufactures brake pads, shims, shock absorbers, and energy absorption components; and sealing technologies primarily for the transportation industry, including passenger cars, light- and heavy-duty commercial and military vehicles, buses, and rail. The Industrial Process segment designs and manufactures industrial pumps, valves, and plant optimization systems; and centrifugal process pumps, twin screw, axials, and positive displacement pumps, and water systems, as well as aftermarket solutions, such as repairs and upgrades services. It serves various customers in industries, such as chemical, oil and gas, mining, and other industrial process markets. The Connect & Control Technologies segment designs and manufactures a range of engineered connectors and specialized control components for critical applications supporting various markets, including aerospace and defense, industrial, transportation, medical, and oil and gas. The connector product portfolio includes electrical connectors, such as circular, rectangular, radio frequency, fiber optic, D-sub miniature, micro-miniature, and cable assemblies; and control products consist of fuel and water pumps, valves, electro-mechanical rotary and linear actuators, and pressure, temperature, limit, and flow switches for various aircraft systems. ITT Inc. was founded in 1920 and is headquartered in White Plains, New York. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/26 00:11
End of Day Share Price2020/02/25 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.