Goldman Sachs Downgrades Illinois Tool Works (ITW) to Sell

Goldman Sachs downgraded Illinois Tool Works (NYSE: ITW) from Neutral to Sell with a price target of $69.00 (from $71.00) citing a rich multiple with limited EPS upside.

The firm sees only +0.9%/+3.1% organic growth in 2013/2014 as strength in Auto OEM/Welding is offset by weakness in IP-driven segments. In addition, while the company is off to a good start with enterprise initiatives, management expectations already assume a meaningful acceleration through the rest of the year and into 2014, limiting upside. Also, the stock is trading at just a 3% discount to covered peers, versus a historical discount of 10%.

The firm maintained FY 2013 EPS estimates at $4.20, cut FY 2014 from $4.70 to $4.60 and cut FY 2015 from $5.35 to $5.20.

For an analyst ratings summary and ratings history on Illinois Tool Works click here. For more ratings news on Illinois Tool Works click here. Shares of Illinois Tool Works closed at $68.43 yesterday, with a 52 week range of $49.07-$71.74.

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