ITT Inc. (ITT) | Investment Case

1. Company Snapshot

1.a. Company Description

ITT Inc.manufactures and sells engineered critical components and customized technology solutions for the transportation, industrial, and energy 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, trucks, light- and heavy-duty commercial and military vehicles, buses, and trains.The Industrial Process segment designs and manufactures industrial pumps, valves, and plant optimization and remote monitoring systems and services; and centrifugal and twin screw positive displacement pumps, as well as aftermarket solutions, such as replacement parts and services.It serves various customers in industries, such as chemical, energy, 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 energy.This segment's connector product portfolio includes electrical connectors, such as circular, rectangular, radio frequency, fiber optic, D-sub miniature, micro-miniature, and cable assemblies, as well as control products consist of actuators, valves, and pumps and switches for flow control applications; rate controls, seat recline locks, and elastomer isolators for aircraft interiors; elastomeric bearings for rotorcraft vibration isolation; heaters, hoses, and composite ducting for environmental control systems; and advanced composites for engine applications.ITT Inc.

was incorporated in 1920 and is headquartered in White Plains, New York.

Show Full description

1.b. Last Insights on ITT

ITT Inc.'s recent performance was driven by strong Q3 earnings and revenue growth, with double-digit increases across key segments. The company's Industrial Process and Connect & Control Technologies segments showed solid performance, fueled by recent acquisitions. Management raised its guidance for revenue and adjusted net income, citing optimistic long-term targets. A notable institutional investor, Cullen Frost Bankers Inc., increased its stake in ITT by 2,777.8%. ITT's growth prospects and excellent execution have been acknowledged, with a Zacks Rank upgrade to #2 (Buy).

1.c. Company Highlights

Last Price	183.39
Change Percentage	1.55%
Open	180.41
Previous Close	180.59
Market Cap ( Millions)	14304
Volume	798613
Year High	197.07
Year Low	105.64
M A 50	180.32
M A 200	158.43

FCF Yield	3.82%
Dividend Yield	0.77%
ROE	17.96%
Debt / Equity	40.66%
Net Debt / EBIDTA	69.13%
Price To Book	5.37
Price Earnings Ratio	29.6
Price To FCF	26.16
Price To sales	3.75
EV / EBITDA	18.13

2. ITT's Q3 2025 Earnings: Strong Growth and Margin Expansion

ITT's financial performance in Q3 2025 was impressive, with revenue growing 13% to $999 million, driven by a 6% organic growth across all segments. The operating income grew nearly twice the organic sales growth rate, and operating margin expanded over 100 basis points excluding M&A. Adjusted EPS grew 21% to $1.78, beating estimates of $1.67. The company's free cash flow margin was over 15%, surpassing the high end of its 2030 target. As Emmanuel Caprais mentioned, "We saw a step-up in growth with organic revenue, EPS, and free cash flow well ahead of our initial expectations."

Publication Date: Nov -01

                                    📋 Highlights
                                    Revenue and Orders Momentum:
                                                Total revenue reached $999 million (13% growth) with $1 billion in orders for the third consecutive quarter (up 3%).
Margin Expansion and Free Cash Flow:
                                                Operating margin expanded over 100 bps excluding M&A, and free cash flow hit $368 million year-to-date (46% growth), surpassing 2030 targets with a 15% margin.
EPS Guidance Raised:
                                                Adjusted EPS guidance midpoint increased to $6.65 ($0.20 higher), driven by improved productivity, acquisitions, and a lower 21.5% tax rate for 2025.
Segment Growth Highlights:
                                                Industrial Process grew 11% organically (projects strength), CCT advanced 6% (aerospace/defense), and Motion Technologies’ KONI surged 12% (rail share gains).
2025 Outlook and Backlog:
                                                Revenue guidance raised to 6-7% total growth (organic 3-5%), with strong 2026 backlog from IP projects and CCT defense awards, plus $500 million free cash flow target.

                                

Segment Performance

All segments contributed to the company's strong performance, with Industrial Process leading the way with 11% organic growth, driven by the projects business. CCT grew 6% organically, with strength in both aerospace and defense. In Motion Technologies, KONI grew 12%, driven by share gains in rail. The company's strong backlog and firm demand in aerospace and defense are expected to drive continued growth.

Valuation Metrics

ITT's current valuation metrics indicate a premium valuation, with a P/E Ratio of 29.87 and EV/EBITDA of 17.48. The company's ROE is 17.96%, indicating strong profitability. The Net Debt / EBITDA ratio is -0.12, indicating a net cash position. The current valuation metrics suggest that the market is pricing in a strong growth outlook, which is consistent with the company's guidance raise for 2025 and expectations for 2026.

Outlook and Guidance

ITT raised its total revenue and EPS outlook for 2025, with total growth expected to be slightly higher at 6% to 7%, while organic revenue remains within the prior range of 3% to 5%. The company expects continued growth in the project business in IP, firm demand in aerospace and defense, and outperformance in Friction OE and rail. The EPS guidance was raised by $0.20 to $6.65, driven by improved productivity, profitable growth from acquisitions, and a slightly lower effective tax rate.

Growth Prospects

The company's growth prospects are driven by its strong backlog, firm demand in aerospace and defense, and outperformance in Friction OE and rail. Analysts estimate revenue growth at 5.7% next year, which is consistent with the company's guidance. The company's focus on high-performance products, with a 100% green energy plant and commitments to $150 million in sales by 2030, is expected to drive growth and margin expansion.

3. NewsRoom

Fisher Asset Management LLC Decreases Position in ITT Inc. $ITT

Dec -04

Source: defenseworld.net

ITT Inc. Board Appoints Nazzic S. Keene Non-Executive Board Chair; Keene to Succeed Timothy H.

Dec -03

Source: businesswire.com

ITT Inc. (ITT) Presents at UBS Global Industrials and Transportation Conference Transcript

Dec -02

Source: seekingalpha.com

MARUY vs. ITT: Which Stock Is the Better Value Option?

Dec -01

Source: zacks.com

Ex-Dividend Reminder: ITT, Lockheed Martin And Northrop Grumman

Nov -28

Source: forbes.com

Head-To-Head Comparison: ITT (NYSE:ITT) and IAC (NASDAQ:IAC)

Nov -27

Source: defenseworld.net

What Makes ITT (ITT) a New Buy Stock

Nov -21

Source: zacks.com

Analyzing Citic (OTCMKTS:CTPCY) and ITT (NYSE:ITT)

Nov -21

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.75%)

6. Segments

Motion Technologies

Expected Growth: 6.5%

Motion Technologies from ITT Inc. achieves 6.5% growth driven by increasing demand for industrial automation, electrification of transportation, and growth in aerospace and defense markets. Additionally, the company's focus on innovation, strategic acquisitions, and expansion into emerging markets contribute to its growth momentum.

Industrial Process

Expected Growth: 6.8%

ITT Inc.'s Industrial Process segment growth of 6.8% is driven by increasing demand for energy-efficient solutions, expansion in emerging markets, and strategic acquisitions. Additionally, the segment benefits from a strong aftermarket presence, with a large installed base of pumps and valves, and a growing focus on digitalization and IoT solutions.

Connect & Control Technologies

Expected Growth: 7.2%

ITT Inc.'s Connect & Control Technologies segment growth of 7.2% is driven by increasing demand for industrial automation, electrification of transportation, and growth in commercial aerospace. Additionally, the segment benefits from its diversified portfolio, strong aftermarket presence, and strategic acquisitions, enabling it to capitalize on emerging trends and technologies.

Eliminations/Other Corporate Costs

Expected Growth: 5.8%

ITT Inc.'s 5.8% growth in Eliminations/Other Corporate Costs is driven by increased investments in digital transformation, higher IT infrastructure expenses, and rising corporate overheads. Additionally, the company's strategic acquisitions and divestitures have led to one-time integration costs, contributing to the growth.

7. Detailed Products

Pumps and Systems

ITT Inc.'s pumps and systems are designed for industrial processes, oil and gas, and mining applications, providing reliable and efficient fluid handling solutions.

Valves and Actuation

ITT Inc.'s valves and actuation products are designed for industrial, oil and gas, and power generation applications, providing precise control and reliability.

Heat Management

ITT Inc.'s heat management products are designed for industrial, aerospace, and automotive applications, providing thermal management solutions.

Connect and Control Technologies

ITT Inc.'s connect and control technologies are designed for industrial, aerospace, and defense applications, providing connectivity and control solutions.

Aerospace and Defense

ITT Inc.'s aerospace and defense products are designed for military and commercial aerospace applications, providing critical components and systems.

8. ITT Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

ITT Inc. operates in a industry where substitutes are available, but they are not a major threat. The company's products and services are differentiated, which reduces the threat of substitutes.

Bargaining Power Of Customers

ITT Inc. has a diverse customer base, which reduces the bargaining power of individual customers. The company's products and services are also customized, which makes it difficult for customers to switch to competitors.

Bargaining Power Of Suppliers

ITT Inc. has a moderate level of dependence on its suppliers. While the company has a diverse supplier base, some suppliers have a higher bargaining power due to their size and importance.

Threat Of New Entrants

The threat of new entrants is low in ITT Inc.'s industry due to high barriers to entry, such as high capital requirements and regulatory hurdles. The company's established brand and customer relationships also make it difficult for new entrants to gain traction.

Intensity Of Rivalry

The intensity of rivalry in ITT Inc.'s industry is high due to the presence of several established players. The company competes with other industry leaders, which leads to a high level of competition and pricing pressure.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	7.77%
Debt Cost	4.57%
Equity Weight	92.23%
Equity Cost	11.10%
WACC	10.59%
Leverage	8.42%

11. Quality Control: ITT Inc. passed 7 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Watts Water Technologies

A-Score: 5.9/10

Value: 2.4

Growth: 6.9

Quality: 8.0

Yield: 1.0

Momentum: 8.0

Volatility: 9.0

1-Year Total Return ->

Donaldson

A-Score: 5.6/10

Value: 2.6

Growth: 5.8

Quality: 6.7

Yield: 2.0

Momentum: 7.0

Volatility: 9.3

1-Year Total Return ->

ITT

A-Score: 5.4/10

Value: 2.4

Growth: 6.7

Quality: 7.2

Yield: 2.0

Momentum: 7.0

Volatility: 7.3

1-Year Total Return ->

IDEX

A-Score: 4.8/10

Value: 3.1

Growth: 4.9

Quality: 7.9

Yield: 3.0

Momentum: 2.0

Volatility: 8.0

1-Year Total Return ->

Nordson

A-Score: 4.7/10

Value: 2.4

Growth: 5.0

Quality: 6.8

Yield: 2.0

Momentum: 3.0

Volatility: 8.7

1-Year Total Return ->

Flowserve

A-Score: 4.7/10

Value: 4.7

Growth: 4.6

Quality: 7.4

Yield: 3.0

Momentum: 4.0

Volatility: 4.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

14.74%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

10.59%

ITT Inc. - US45073V1089

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ITT

1.c. Company Highlights

Better Quality

Expensive

Less Volatile

Earnings Beats

Revenues Beats

Medium Volatility

Revenues Miss

Fairly Valued

Average Quality

2. ITT's Q3 2025 Earnings: Strong Growth and Margin Expansion

Segment Performance

Valuation Metrics

Outlook and Guidance

Growth Prospects

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.75%)

6. Segments

Motion Technologies

Expected Growth: 6.5%

Industrial Process

Expected Growth: 6.8%

Connect & Control Technologies

Expected Growth: 7.2%

Eliminations/Other Corporate Costs

Expected Growth: 5.8%

7. Detailed Products

Pumps and Systems

Valves and Actuation

Heat Management

Connect and Control Technologies

Aerospace and Defense

8. ITT Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: ITT Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

183.39$

Current Price

183.39$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA