ITW Is Down 10% in 180 Days. What History Says Now

Illinois Tool Works Is Down 9.9% in 180 Days. What History Says

Illinois Tool Works Inc. (ITW) is down 9.9% from its all-time high as of September 1, 2026, and has been falling for approximately 180 days. The Drawdown Severity Score™ stands at 2.1, placing it in the Moderately Elevated (yellow) zone. In 80 comparable prior drops of 5% or more, the stock took an average of 152 days to recover.

Understanding the Current Drawdown Severity

The transition of ITW from the green zone to the yellow zone represents a shift in the stock's intermediate-term risk profile. Our data shows that the current price of $269.88 sits 9.9% below the all-time high of $299.60. This decline has progressed over a span of 180 days, indicating a slow, persistent grind downward rather than a rapid, high-velocity sell-off.

The Drawdown Severity Score™ of 2.1 classifies this movement as Moderately Elevated. When an asset enters this zone, it indicates that the pullback has surpassed routine market noise and is beginning to test deeper historical support levels. The previous green zone status reflected a period of relative stability, making this transition a notable departure from the stock's recent price behavior.

Understanding the mechanics of this decline requires looking at the speed and structure of the price action. A 180-day descent means the stock has experienced successive lower highs and lower lows over a six-month period. This prolonged duration can exhaust short-term buyers and shift the technical picture from a simple pause in an upward trend to a more entrenched correction.

Comparing Current Metrics to Historical Averages

To put the current -9.9% decline into perspective, we must compare it to the complete historical record of the stock. Our database tracks a total of 309 historical drawdown events for ITW. This extensive history provides a robust baseline for evaluating whether the current price action is unusual or merely a standard variation within its normal trading range.

Historically, the average maximum drawdown for ITW across all 309 recorded events is -4.6%. The average duration of these drawdown events is 45 days. Comparing these historical benchmarks to the current metrics reveals that the ongoing pullback is significantly more severe and much longer-lasting than the typical historical decline.

The current duration of 180 days is four times longer than the historical average drawdown duration of 45 days. Similarly, the current depth of -9.9% is more than double the average historical drawdown depth of -4.6%. This indicates that the current pullback is an extended deviation from typical historical behavior, reflecting a more persistent period of distribution.

Mathematically, a deeper drawdown requires a disproportionately larger recovery effort to reclaim previous peaks. While a -9.9% drawdown may seem modest, the stock must rise by exactly 11.01% from its current price of $269.88 to reach its all-time high of $299.60. As drawdowns deepen, this recovery requirement escalates exponentially, which is why monitoring the severity score is critical for risk management.

Analysis of the 80 Comparable Pullbacks

To gain deeper insight, we filter the historical record to look only at pullbacks that reached a depth of 5% or more. This filter isolates more significant corrections from minor daily fluctuations. In the history of ITW, the stock has experienced a drop of 5% or more exactly 80 times.

Analyzing these 80 comparable drops reveals that the average duration of such pullbacks is 152 days. This historical average includes the time spent falling from the peak to the trough, as well as the time required to recover back to the previous all-time high.

Because the current drawdown has already lasted 180 days, it has exceeded the historical average recovery duration for comparable drops by 28 days. When a drawdown outlasts its historical average, it suggests that the overhead supply of shares is taking longer than usual to clear. This extended duration increases the probability that the stock remains in the yellow zone for a longer period before establishing a definitive bottom.

Historically, when ITW has crossed the 152-day mark without achieving a full recovery, the recovery process has often evolved into a multi-month consolidation phase. The historical data shows that these extended pullbacks require a base-building process where the stock trades sideways to wear out remaining sellers before mounting a sustained upward move.

Valuation Context and Price Action

As of 2026-08-31, our data shows a contrast between the -9.9% price drawdown and the stock's historical valuation multiples. The Price-to-Sales ratio (P/S) is 4.8, placing it in the 87th percentile of its own daily record since 2006-08-31, which is above its historical median of 3.0. Similarly, the EV-to-EBITDA ratio (EV/EBITDA) stands at 18.8, ranking in the 85th percentile compared to its historical median of 13.6. This positions both multiples above their typical historical ranges despite the ongoing price correction.

Methodology and Data Limits

Our analysis relies strictly on historical price, drawdown, and valuation data. We do not incorporate external qualitative factors such as corporate earnings reports, management changes, macroeconomic policy, or broader stock market narratives.

By focusing entirely on quantitative price action and historical comparisons, we provide a clean, unbiased look at how the current drawdown fits into the asset's historical footprint. This approach helps eliminate the emotional noise often associated with market pullbacks, though it does not account for fundamental shifts in the business that might alter its long-term growth trajectory.

What to Watch Moving Forward

Investors tracking ITW should monitor several key price and duration markers to assess whether the technical picture is stabilizing or deteriorating. The first critical threshold is the current drawdown level of -9.9%. If the price drops further, a breach of the -10% level would mark a double-digit correction, which historically can trigger additional automated selling and potentially push the severity score higher.

The second key metric is the duration marker. Having surpassed the 152-day average for comparable pullbacks, the current 180-day drawdown is entering extended territory. If the stock remains below its all-time high as the duration approaches 200 days, it will signal one of the more prolonged consolidation periods in the stock's recent history.

Finally, observers should watch the Drawdown Severity Score™ itself. A move below 2.0 would signal that the price is beginning to recover and stabilize, potentially paving the way for a return to the green zone. Conversely, an increase in the severity score toward the red zone would indicate that the current pullback is gaining downward momentum, requiring a much larger recovery effort to reclaim the peak of $299.60.