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ITW vs ZWS
Which Stock Would AI Choose? Illinois Tool Works (ITW) vs. Zurn Elkay Water Solutions (ZWS) Stock Comparison
Key Takeaways
- ITW is a diversified, multi-industrial manufacturer with a roughly $76 billion market capitalization and best-in-class operating margins near 27%.
- ZWS is a smaller, pure-play water management business (roughly $8 billion market cap) delivering double-digit organic sales growth and rapidly expanding margins.
- ITW offers scale, defensive diversification, and aggressive capital returns, including a new $6 billion buyback and a 7% dividend increase.
- ZWS offers faster growth and higher-margin momentum, but trades at a premium valuation multiple relative to ITW.
- Relative performance favors ZWS on growth and margin expansion, while ITW stands out on valuation, cash flow conversion, and balance-sheet strength.
Introduction
Investors weighing industrial names often face a choice between established, diversified manufacturers and more focused, faster-growing specialists. This stock comparison contrasts ITW (Illinois Tool Works), a century-old multi-industrial leader, with ZWS (Zurn Elkay Water Solutions), a growth-oriented, pure-play water management company. The two operate in different niches of the industrial economy, which makes their relative performance and market positioning instructive for both long-term investors and active traders seeking to understand where risk and reward currently sit across the sector.
ITW Overview and Recent Performance
Illinois Tool Works is a Fortune 300, diversified global manufacturer organized around seven segments, including Automotive OEM, Food Equipment, Test & Measurement and Electronics, Welding, Polymers & Fluids, Construction Products, and Specialty Products. Its decentralized "ITW Business Model" consistently produces industry-leading margins and strong free cash flow conversion.
In recent weeks, ITW has reinforced its reputation for capital discipline. The company raised its full-year 2026 outlook after reporting second-quarter adjusted earnings of $2.84 per share on revenue of $4.30 billion, driven by double-digit organic growth in its Welding and Test & Measurement segments. Management also authorized a new $6 billion share repurchase program and raised its annual dividend by 7%. Operating margin reached 26.7% in the quarter. At the same time, softer demand in food equipment and sluggish global automotive production have remained headwinds, contributing to a mixed near-term sentiment and some analyst rating downgrades despite solid fundamentals.
ZWS Overview and Recent Performance
Zurn Elkay Water Solutions is a Milwaukee-based, pure-play water management company that designs and markets specification-driven products for water safety, flow systems, filtration, and drinking water. Following its Elkay merger, the company has positioned itself around a broad sustainable product portfolio tied to health, hydration, and safety.
Recent market activity has highlighted ZWS's momentum. In its latest reported quarter, sales grew roughly 11% year over year to $433 million, while adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margin expanded 160 basis points to 26.8%. The company has reduced net debt leverage to about 0.5x and continues to evaluate acquisition opportunities, underscoring balance-sheet flexibility. Analysts have broadly raised price targets in recent weeks, citing execution, margin expansion, and non-residential retrofit demand. However, the stock's premium valuation multiple and a somewhat mixed near-term share-price trajectory have kept sentiment balanced rather than uniformly bullish.
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Head-to-Head Comparison
The core contrast between these two names is diversification versus focus. ITW spreads exposure across automotive, electronics, construction, food service, and industrial end markets, which dampens volatility but also caps headline growth. ZWS concentrates on water-related products, giving it a narrower but faster-growing demand profile tied to infrastructure, non-residential construction, and sustainability themes.
On growth, ZWS holds a clear edge, with recent organic sales growth in the low double digits compared with ITW's mid-single-digit revenue growth. On profitability, both companies now post operating margins in the mid-to-high 20s, though ZWS is expanding margins at a faster clip. On valuation, ITW trades at a lower price-to-earnings multiple and delivers stronger free cash flow conversion, while ZWS commands a premium that reflects its growth trajectory.
Risk profiles also differ. ITW carries cyclical exposure to automotive production and food equipment, whereas ZWS is more sensitive to interest rates and non-residential construction spending. On capital returns, ITW's larger buyback and higher dividend yield favor income-oriented investors, while ZWS's disciplined leverage and acquisition pipeline appeal to growth-focused capital allocators.
Tickeron AI Verdict
Based on observable trend consistency, catalysts, and relative positioning, Tickeron's AI would likely favor ZWS in the current environment, given its stronger and more consistent momentum, sustained margin expansion, and clearer near-term growth catalysts. The higher valuation is a notable trade-off, but trend-following models tend to weight recent price behavior and earnings revisions more heavily than absolute multiples. ITW's defensive diversification, superior cash generation, and shareholder returns make it the steadier holding, yet its comparatively muted momentum suggests the AI signal would tilt toward ZWS. This assessment is probabilistic rather than definitive, reflecting measurable factors rather than a guarantee of future performance.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
To compare these two companies we present long-term analysis, their fundamental ratings and make comparative short-term technical analysis which are presented below. The conclusion is ITW is a Hold and ZWS is a Hold.
ITW in upward trend: price may ascend as a result of having broken its lower Bollinger Band on September 30, 2026
ITW may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In 21 of 32 cases where ITW's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are 66%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where ITW's RSI Indicator exited the oversold zone, 10 of 24 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 42%.
The Momentum Indicator moved above the 0 level on October 13, 2026. You may want to consider a long position or call options on ITW as a result. In 56 of 90 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 62%.
The Moving Average Convergence Divergence (MACD) for ITW just turned positive on October 08, 2026. Looking at past instances where ITW's MACD turned positive, the stock continued to rise in 26 of 48 cases over the following month. The odds of a continued upward trend are 54%.
Following a +1.04% 3-day Advance, the price is estimated to grow further. Considering data from situations where ITW advanced for three days, in 168 of 328 cases, the price rose further within the following month. The odds of a continued upward trend are 51%.
Bearish Trend Analysis
The Stochastic Oscillator has been in the overbought zone for 2 days. Expect a price pull-back in the near future.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ITW declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 41%.
The Aroon Indicator for ITW entered a downward trend on October 07, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 13 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is 25 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 37 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 75, placing this stock slightly better than average.
The Tickeron Price Growth Rating for this company is 47 (best 1 - 100 worst), indicating steady price growth. ITW’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Seasonality Score of 85 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Valuation Rating of 95 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: ITW's P/B Ratio (26.795) is slightly higher than the industry average of (4.583). P/E Ratio (24.618) is within average values for comparable stocks, (38.005). Projected Growth (PEG Ratio) (2.543) is also within normal values, averaging (1.879). Dividend Yield (0.025) settles around the average of (0.032) among similar stocks. P/S Ratio (4.699) is also within normal values, averaging (186.943).
ZWS's RSI Oscillator climbs out of oversold territory
The RSI Oscillator for ZWS moved out of oversold territory on September 11, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 33 similar instances when the indicator left oversold territory. In 21 of the 33 cases the stock moved higher. This puts the odds of a move higher at 64%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 33 of 53 cases where ZWS's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 62%.
The Moving Average Convergence Divergence (MACD) for ZWS just turned positive on September 22, 2026. Looking at past instances where ZWS's MACD turned positive, the stock continued to rise in 28 of 46 cases over the following month. The odds of a continued upward trend are 61%.
Following a +1.33% 3-day Advance, the price is estimated to grow further. Considering data from situations where ZWS advanced for three days, in 181 of 297 cases, the price rose further within the following month. The odds of a continued upward trend are 61%.
The Aroon Indicator entered an Uptrend today. In 110 of 204 cases where ZWS Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 54%.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 15, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on ZWS as a result. In 46 of 84 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 55%.
The 50-day moving average for ZWS moved below the 200-day moving average on October 13, 2026. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ZWS declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 61%.
ZWS broke above its upper Bollinger Band on October 02, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
The Tickeron Profit vs. Risk Rating rating for this company is 43 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 93, placing this stock slightly better than average.
The Tickeron Price Growth Rating for this company is 50 (best 1 - 100 worst), indicating steady price growth. ZWS’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 51 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of 79 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (4.705) is normal, around the industry mean (11.476). P/E Ratio (28.695) is within average values for comparable stocks, (-17.856). Projected Growth (PEG Ratio) (1.523) is also within normal values, averaging (0.975). Dividend Yield (0.009) settles around the average of (0.057) among similar stocks. P/S Ratio (4.373) is also within normal values, averaging (251.106).
The Tickeron PE Growth Rating for this company is 83 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of 85 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
ITW | ZWS | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 43 | 38 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 95 Overvalued | 79 Overvalued | |
PROFIT vs RISK RATING 1..100 | 37 | 43 | |
SMR RATING 1..100 | 13 | 51 | |
PRICE GROWTH RATING 1..100 | 47 | 50 | |
P/E GROWTH RATING 1..100 | 25 | 83 | |
SEASONALITY SCORE 1..100 | 85 | 85 |
Tickeron ratings are formulated such that a rating of 1 designates the most successful stocks in a given industry, while a rating of 100 points to the least successful stocks for that industry.
ZWS's Valuation (79) in the Industrial Machinery industry is in the same range as ITW (95). This means that ZWS’s stock grew similarly to ITW’s over the last 12 months.
ITW's Profit vs Risk Rating (37) in the Industrial Machinery industry is in the same range as ZWS (43). This means that ITW’s stock grew similarly to ZWS’s over the last 12 months.
ITW's SMR Rating (13) in the Industrial Machinery industry is somewhat better than the same rating for ZWS (51). This means that ITW’s stock grew somewhat faster than ZWS’s over the last 12 months.
ITW's Price Growth Rating (47) in the Industrial Machinery industry is in the same range as ZWS (50). This means that ITW’s stock grew similarly to ZWS’s over the last 12 months.
ITW's P/E Growth Rating (25) in the Industrial Machinery industry is somewhat better than the same rating for ZWS (83). This means that ITW’s stock grew somewhat faster than ZWS’s over the last 12 months.
| ITW | ZWS | |
|---|---|---|
| RSI ODDS (%) | 4 days ago 42% | 7 days ago 64% |
| Stochastic ODDS (%) | 4 days ago 54% | 4 days ago 62% |
| Momentum ODDS (%) | 4 days ago 62% | 4 days ago 55% |
| MACD ODDS (%) | 4 days ago 54% | 4 days ago 61% |
| TrendWeek ODDS (%) | 4 days ago 54% | 4 days ago 62% |
| TrendMonth ODDS (%) | 4 days ago 50% | 4 days ago 58% |
| Advances ODDS (%) | 4 days ago 51% | 7 days ago 61% |
| Declines ODDS (%) | 20 days ago 41% | 5 days ago 61% |
| BollingerBands ODDS (%) | 4 days ago 66% | 4 days ago 54% |
| Aroon ODDS (%) | 4 days ago 49% | 4 days ago 54% |
Long-Term Analysis
It is best to consider a long-term outlook for a ticker by using Fundamental Analysis (FA) ratings. The rating of 1 to 100, where 1 is best and 100 is worst, is divided into thirds. The first third (a green rating of 1-33) indicates that the ticker is undervalued; the second third (a grey number between 34 and 66) means that the ticker is valued fairly; and the last third (red number of 67 to 100) reflects that the ticker is overvalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).
ITW’s FA Score shows that 2 FA rating(s) are green while ZWS’s FA Score has 0 green FA rating(s).
- ITW’s FA Score: 2 green, 3 red.
- ZWS’s FA Score: 0 green, 5 red.
Short-Term Analysis
It is best to consider a short-term outlook for a ticker by using Technical Analysis (TA) indicators. We use Odds of Success as the percentage of outcomes which confirm successful trade signals in the past.
If the Odds of Success (the likelihood of the continuation of a trend) for each indicator are greater than 50%, then the generated signal is confirmed. A green percentage from 90% to 51% indicates that the ticker is in a bullish trend. A red percentage from 90% - 51% indicates that the ticker is in a bearish trend. All grey percentages are below 50% and are considered not to confirm the trend signal.
ITW’s TA Score shows that 5 TA indicator(s) are bullish while ZWS’s TA Score has 5 bullish TA indicator(s).
- ITW’s TA Score: 5 bullish, 3 bearish.
- ZWS’s TA Score: 5 bullish, 4 bearish.
Price Growth
ITW (@Industrial Machinery) experienced а +3.09% price change this week, while ZWS (@Industrial Specialties) price change was +1.05% for the same time period.
The average weekly price growth across all stocks in the @Industrial Machinery industry was -8.04%. For the same industry, the average monthly price growth was -13.31%, and the average quarterly price growth was -18.69%.
The average weekly price growth across all stocks in the @Industrial Specialties industry was -9.07%. For the same industry, the average monthly price growth was -15.77%, and the average quarterly price growth was -24.07%.
Reported Earning Dates
ITW is expected to report earnings on Oct 27, 2026.
ZWS is expected to report earnings on Nov 03, 2026.
Industries' Descriptions
@Industrial Machinery (-8.04% weekly)The industry makes and maintains machines for consumers, the industry, and most other companies. While it has traditionally been categorized as heavy industry, some smaller companies are also branching into the light category. The industry is pivotal in providing the equipment for production in businesses like agriculture, mining, industry and construction, gas, electricity and water utilities. It also supplies supporting equipment for almost all sectors of the economy, such as equipment for heating, and air conditioning of buildings. Illinois Tool Works Inc., Parker-Hannifin Corporation and Rockwell Automation Inc are some of the major U.S. companies operating in this industry.
@Industrial Specialties (-9.07% weekly)Companies in the industrial specialties industry process basic materials and minerals into various specialty products, such as flat and safety glass, fire retardant products, paints and coatings. Examples of companies operating in this industry are Sherwin-Williams Company, PPG Industries, Inc. and RPM International Inc.
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ITW and
Correlation & Price change
A.I.dvisor indicates that over the last year, ITW has been closely correlated with IR. These tickers have moved in lockstep 74% of the time. This A.I.-generated data suggests there is a high statistical probability that if ITW jumps, then IR could also see price increases.
ZWS and
Correlation & Price change
A.I.dvisor indicates that over the last year, ZWS has been closely correlated with XYL. These tickers have moved in lockstep 74% of the time. This A.I.-generated data suggests there is a high statistical probability that if ZWS jumps, then XYL could also see price increases.
| Ticker / NAME | Correlation To ZWS | 1D Price Change % | ||
|---|---|---|---|---|
| ZWS | 100% | +0.49% | ||
| XYL - ZWS | 74% Closely correlated | +0.66% | ||
| LECO - ZWS | 70% Closely correlated | +0.71% | ||
| HLIO - ZWS | 67% Closely correlated | -0.32% | ||
| HLMN - ZWS | 67% Closely correlated | +1.52% | ||
| PNR - ZWS | 65% Loosely correlated | -0.02% | ||
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