ITT Inc.: Expansion and action, driving market appeal

ITT Inc. continues to strengthen its position as a leading manufacturer of engineered components and technology solutions, driven by consistent performance across all segments. The recent acquisition of KOHO Kompressorsysteme underscores its commitment to capturing growth opportunities in alternative marine fuels.

Founded in 1920 and headquartered in Stamford, US, ITT Inc. manufactures engineered components and technology solutions for the transport, industrial  and energy markets. Its segments include Motion Technologies (brake pads), Industrial Process (fluid process equipment) and Connect & Control Technologies (connector solutions, energy absorption, flow control components).

Svanehoj, an ITT company, completed its acquisition of the German company Köhler & Hörter GmbH (KOHO Kompressorsysteme) on October 1, 2025. This strategic move expands Svanehoj's capabilities beyond marine pumps into high-quality reciprocating compressors for hydrogen, hydrocarbons, and demanding gas applications. By combining KOHO's specialized compressor expertise with ITT's global supply chain and sales strengths, the acquisition positions Svanehoj to capture emerging opportunities in alternative marine fuels including LNG, ammonia, and hydrogen. This is Svanehoj's second acquisition in 2025.

Consistent expansion trend

ITT Inc. demonstrated steady performance over FY 21-24, achieving a revenue CAGR of 9.5%, reaching $3.6bn, driven by industrial segments and gaining share on strategic defense platforms. EBIT registered a CAGR of 13.3% to $628m. Consecutively, margins improved by 149bp to 17.3%.

Over FY 21-24, FCF rose from $265m to $430m. This was led by cash flow transitioning from an outflow of $7.6m to an inflow of $562m. In addition, its ROE improved from 14.7% to 19.7%.

Moreover, the company reported strong Q3 25 results, with revenue of $999.1m (up 13% y/y), adjusted EPS of $1.8 (up 21% y/y), with it raising its full-year guidance, driven by organic growth, margin expansion and robust cash flow generation.

In comparison, Fortive Corporation, a local peer, reported a revenue CAGR of 5.9% over FY 21-24, reaching $6.2bn in FY 24. EBIT grew at a CAGR of 12.1% to $1.1bn, with margins expanding from 16.9% to 18.3%.

Solid outlook

ITT Inc.'s stock delivered decent returns of 16.7% over the past year. In comparison, Fortive Corporation delivered negative returns of 33.5%. The company paid an annual dividend of $1.3 in FY 24, resulting in a dividend yield of 0.9%.

ITT Inc. is currently trading at a P/E of 28.9x, based on the FY 25 estimated EPS of $6.3, which is higher than its 3-year historical average of 21.8x but lower than that of Fortive Corporation (32.2x). The company is currently trading at an EV/EBIT of 20.5x, based on the FY 25 estimated EBIT of $710.2m, which is higher than its 3-year historical average of 16.3x but lower than Fortive Corporation (26.3x).

The stock is mostly liked by analysts who cover it, with 10 having 'Buy' ratings and two having 'Hold' ratings for a target price of $208.9, implying 14.6% upside potential from the share's current price.

Looking ahead, analysts project EBIT CAGR of 10.7%, reaching $870.9m, with margins expanding by 233bp to 20.0% over FY 24-27. Net income is projected to rise at a CAGR of 9.1%, reaching $673.3m. However, for Fortive Corporation, the EBIT is estimated to decrease at a CAGR of 9.3%, and net income to drop at a CAGR of 7.0%.

Overall, ITT Inc. demonstrates strong growth and strategic expansion with robust returns, favorable analyst ratings, and promising future projections, ITT Inc. is well-positioned for continued success, driven by innovation, market opportunities, and effective execution of its strategic initiatives. However, it faces risks including economic uncertainty, project delays, operational integration, raw material costs, customer demand cycles, cybersecurity, regulatory compliance, and climate-related impacts.