Illinois Tool Works (ITW) Higher On Analyst's Bullish View

Shares of Illinois Tool Works Inc. (NYSE: ITW) are higher today after Goldman Sachs upgraded the stock and added it to their prestigious Conviction Buy List. The upgrade was part of a broader upgrade on Multi-Industry stocks to Attractive from Neutral. Shares of ITW are 4.7% higher in mid-day action today.

Goldman said they expect Illinois Tool Works to raise Q3 guidance and beat consensus estimates over the next 2-3 quarters. The firm sees upside to the consensus due to operating leverage and restructuring savings, early stage recovery in residential construction and a ramp in auto production. The firm thinks ITW could raise Q3 EPS guidance when it reports August base business results on September 15th to $0.51-$0.56 from $0.39-$0.51 and the consensus of $0.46.

Goldman raised their 2009 EPS estimates on ITW to $1.71 from $1.60, 2010 to $2.50 from $2.20 and 2011 to $3.05 from $2.70.

The firm set a $55 price target on ITW, which represent 26% upside from current levels.

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