BofA lifts ITT stock price target to $170 from $145

On Wednesday, BofA Securities raised its price target for ITT Corp. (NYSE:ITT) to $170.00, up from the previous target of $145.00, while maintaining a Buy rating on the stock. The adjustment follows ITT’s investor day held on May 15 in New York City, where the company outlined its future strategy, including a focus on mergers and acquisitions (M&A) and organic growth.

ITT’s management conveyed a commitment to significantly increase its M&A activities while continuing to achieve top-tier organic performance. The firm has set an ambitious goal of reaching $11 in organic earnings per share (EPS) by 2030, which suggests a compound annual growth rate (CAGR) of 12% from 2025 to 2030. Including all factors, this figure could rise to a 14% CAGR, compared to the 9% CAGR from 2019 to 2024 and 13% CAGR from 2021 to 2024.

BofA Securities views ITT’s long-term organic growth targets as attainable and anticipates that the company will maintain its position in the top quartile for organic results. The investor day also showcased a variety of ITT’s product technologies. The company has previously indicated plans to significantly boost its M&A capabilities.

Further emphasizing ITT’s strategic shift, the company is now placing greater emphasis on pricing and customization strategies, akin to those employed by some of the leading companies within BofA’s coverage, such as AME, ITW, and PH, which have achieved industry-leading margins. ITT’s CEO Luca Savi highlighted that organic volume growth remains a key priority for the company.

The challenge for ITT will be to find the right balance between driving organic volume growth, implementing pricing/customization, and pursuing M&A opportunities. Historically, the best-performing companies have managed to excel in two out of these three areas. The raised price objective to $170 is now based on a 15x multiple of the estimated 2026 enterprise value to EBITDA (EV/EBITDA), which is at a premium to peers that are trading at 14x their estimated 2025 EV/EBITDA. The stock currently trades at an EV/EBITDA of 16x and a P/E ratio of 24x, and according to InvestingPro’s Fair Value analysis, appears to be trading above its intrinsic value. BofA justifies this premium valuation due to ITT’s superior execution and above-peer organic growth. For deeper insights into ITT’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

In other recent news, ITT Corp. has announced ambitious financial targets for 2030, aiming for over 5% average annual organic revenue growth and a total growth of approximately 10% when including acquisitions. The company plans to expand its adjusted operating margin to around 23% and expects adjusted earnings per share from existing businesses to exceed $11. ITT also intends to invest between $500-700 million annually in acquisitions, contributing an additional $0.75 to $1.00 of EPS, targeting a total of more than $12 by 2030. Analysts have responded positively to these developments; TD Cowen raised ITT’s stock price target to $170, citing the company’s "2030 Vision" and strategic growth potential. Similarly, Stifel increased its price target to $171, maintaining a Buy rating and expressing optimism about ITT’s long-term financial goals and acquisition strategy. Citi has also maintained a Buy rating with a $159 price target, highlighting ITT’s focus on organic and inorganic growth opportunities. DA Davidson reaffirmed its Buy rating and $170 price target, recognizing ITT as part of its Best-of-Breed Bison initiative, which underscores the company’s strong profitability and competitive advantages. These developments reflect a broad consensus among analysts that ITT is well-positioned for sustained growth and value creation.

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