Sell! Analysts say this stock is facing unique challenges under Trump's tariff policies.

Bank of America Corp's latest securities report pointed out that diversified industrial manufacturer Illinois Tool Works Inc. (ITW.US) faces unique challenges under Trump's tariff policy, with exposure levels far higher than other similar companies. Analyst Andrew Obin therefore downgraded its stock rating from "hold" to "sell" and significantly lowered its target stock price from $245 per share to $220. As of Wednesday morning, ITW's stock price remained almost unchanged at $239.99. So far this year, its stock price has fallen by approximately 5%, underperforming the market. At the same time, the S&P 500 index rose 0.2% and the Dow Jones Industrial Average rose 0.4%. Obin wrote in the report, "Considering ITW's end-market composition, the company is particularly vulnerable under tariff disturbances." ITW's business is extensive, covering multiple areas such as automotive components, food equipment, electronic testing instruments, welding equipment, and construction products, making it one of the most diversified companies in the industrial manufacturing sector. However, its high involvement in the automotive and consumer goods sectors makes it a "hard-hit area" for tariff impacts. Obin further pointed out that ITW's profit expectations are under pressure for downward revisions, primarily due to its slowing organic growth. He wrote, "The negative profit estimate revisions we see are mainly due to weak internal growth." From an overall Wall Street perspective, ITW is not favored by analysts. Currently, only 14% of analysts give ITW a "buy" rating, while the average "buy" rating for S&P 500 index components is around 55%. The average target stock price for ITW is $250 per share. The downgrade to "sell" this time did not change the percentage of "buy" ratings, but increased the percentage of "sell" ratings to 23%, about three times the average for S&P 500 index components. Although Obin acknowledges that ITW has consistently shown strong performance in business execution, he also points out that this advantage has already been fully reflected in the current valuation. The stock is currently trading at a forward P/E ratio of 23 times 2025 earnings, higher than the overall level of around 21 times for the S&P 500. Once profit expectations are revised downwards, this valuation level will appear even more expensive.