Jefferies Reiterates Buy Rating On ITW

Jefferies is reiterating its Buy rating on Illinois Tool Works ITW. “A higher than expected 2011 sales outlook was muted by cost/price headwinds (that should dissipate through the year) but resulted in an earnings outlook that was in-line with consensus,” Jefferies writes. “Base incrementals are still expected to be 30-35% which could imply guidance is conservative should end markets (construction mainly) recover sooner than expected. We maintain our 2011 estimate of $3.75 and continue to view the shares as undervalued versus the peer group.” Illinois Tool Works closed Monday at $53.49.