ITW Is Down 10% in 90 Days. What History Says Now

ITW Is Down 10% in 90 Days. What History Says About the Recovery

Illinois Tool Works Inc. (ITW) is now down 10% from its all-time high as of July 7, 2026, having just exited the yellow zone after approximately 90 days. The Drawdown Severity Score™ has improved to 2.0. In 79 comparable prior drops of 5% or more, the stock experienced an average drawdown duration of 149 days.

The Verified Severity Improvement

Our data shows that the stock has transitioned from the yellow zone to the green zone as of July 7, 2026. This shift indicates a reduction in drawdown risk, with the Drawdown Severity Score™ moderating to 2.0. A severity score of 2.0 corresponds to a slightly elevated risk profile, which represents a clear improvement from the elevated risk levels associated with the yellow zone.

The current drawdown stands at -9.6%, with the stock priced at $270.98. This is a recovery from deeper levels experienced during the 93 days that the asset has spent in this active drawdown. The peak price of $299.60 remains the key reference point for this cycle. The movement into the green zone suggests that the intensity of the selling pressure has stabilized, returning the stock to historical correction parameters.

Where It Was: Peak Severity and Yellow Zone Duration

Before reaching its current state as of July 7, 2026, the stock spent a total of 93 days in this active drawdown. During this period, the price fell from its all-time high of $299.60 to its current level of $270.98. The duration of 93 days is more than double the historical average duration for all drawdowns in our database.

Our historical records show that the average drawdown duration for this stock is 44 days. The fact that the current event has lasted 93 days indicates a more prolonged period of weakness than is typical for this asset. However, when compared to deeper historical corrections, this duration aligns more closely with long-term patterns.

The table below compares the current drawdown metrics against the long-term historical averages for all drawdown events recorded since our data collection began:

Distribution of Historical Drawdown Events

To understand the significance of the current -9.6% drawdown, we must examine the complete historical distribution of the asset. Our database has tracked a total of 306 historical drawdown events for this stock. The average maximum drawdown across all 306 events is -4.6%.

This historical average indicates that a typical correction for this stock is relatively shallow. The current drawdown of -9.6% is more than twice the depth of the historical average. This places the current event in a distinct category of severity.

An analysis of the 306 historical events reveals a clear distribution:

This distribution shows that approximately 74.18% of all drawdowns are resolved before reaching a -5.0% threshold. The current drawdown of -9.6% belongs to the remaining 25.82% of events that breach this level. Once a drawdown exceeds -5.0%, the recovery timeline historically extends.

Historical Context of ITW Drawdowns

Our data shows that the stock has dropped by 5% or more from its peak a total of 79 times in its history. These 79 instances serve as the most accurate comparable group for the current -9.6% drawdown.

The average duration of these 79 comparable drops is 149 days. The current drawdown has lasted 93 days as of July 7, 2026. This means the current correction is 56 days shorter than the historical average duration of 149 days for comparable drops.

This historical comparison indicates that while the current 93-day duration is long compared to a typical 44-day minor pullback, it is still early relative to the historical average recovery time for larger drops. The table below outlines how the current active drawdown compares to the historical averages of the 79 comparable events:

Valuation Context and Historical Multiples

As of 2026-07-06, our data shows a contrast between the stock's price drawdown and its historical valuation multiples. The price-to-sales ratio stands at 4.9, which sits in the 90th percentile of its own daily record since 2006-07-03, well above its historical median of 2.9. Similarly, the EV-to-EBITDA ratio is 18.9, placing it in the 88th percentile of its own daily history since 2006-07-03, compared to a historical median of 13.5. These figures indicate that despite the -9.6% price pullback, both valuation multiples remain elevated relative to the asset's own long-term historical ranges.

Data Limits and Methodology

Our analysis relies exclusively on mathematical price and drawdown history. We do not incorporate external factors, corporate earnings, macroeconomic indicators, or industry trends into this assessment. This data-driven framework is designed to evaluate risk based on historical price behavior and the proprietary Drawdown Severity Score™ rather than subjective market narratives.

By focusing solely on price action and duration metrics, we provide a clean statistical baseline. This baseline allows investors to compare the current correction against 306 historical events without the noise of changing market sentiment or analyst opinions. The historical patterns documented in this analysis represent past performance, which does not guarantee future results.

What to Watch: Key Severity Thresholds

To monitor the progress of this drawdown, we can establish specific price levels based on historical thresholds. The current price of $270.98 sits -9.6% below the all-time high of $299.60.

If the stock experiences further downward movement, crossing below $269.64 would push the drawdown past -10.0%. A move past -10.0% would represent a new phase of this correction and could alter the Drawdown Severity Score™ depending on the speed of the decline.

Conversely, if the stock moves upward, crossing above $284.62 would bring the drawdown to under -5.0%. This would signal a recovery, moving the asset closer to the green zone boundary and eventually a full recovery.

The table below outlines these key price levels and their corresponding drawdown percentages:

Monitoring these levels provides a structured way to track the recovery process. The transition from the yellow zone to the green zone as of July 7, 2026, marks an important technical milestone, but the active drawdown of 93 days remains underway.