ITT Inc. (ITT): A Bull Case Theory

We came across a bullish thesis on ITT Inc. on X.com by longonlybets. In this article, we will summarize the bulls’ thesis on ITT. ITT Inc.'s share was trading at $174.05 as of September 10th. ITT’s trailing and forward P/E were 27.41 and 23.70 respectively according to Yahoo Finance.

ITT Inc. (ITT) is a mid-cap industrial compounder with a portfolio of businesses in less glamorous but essential end markets, including auto brake pads, critical rail safety components, industrial pumps and valves, and industrial connectivity/control devices such as actuators, monitoring devices, connector plugs, and switches. Despite its low profile, ITT has built a resilient business driven by operational excellence, margin expansion, and strategic M&A.

The company’s growth strategy, highlighted at its May 2025 investor day, focuses on productivity gains—leveraging learnings from its Motion Technologies segment across other divisions—value-based pricing rather than blanket price hikes, and operating leverage as volumes expand. Over time, ITT is deliberately shifting its mix away from cyclical auto OE (currently 21% of revenue) toward higher-margin, niche industrial components in industrial flow and aerospace/defense connectors. This transition, combined with ongoing efficiency initiatives, positions ITT to achieve over $11 in EPS by 2030, representing high-single-digit upside versus current consensus, with additional potential to surpass $12 EPS when factoring in planned ~$600 million in annual M&A through 2030 and guided share repurchases.

The company’s disciplined M&A approach, demonstrated through acquisitions like kSARIA and Svanehoj, enhances both earnings and strategic positioning. With ROIC around 20% and free cash flow margins approaching 15%, ITT could see a modest re-rating toward peers like Ingersoll, suggesting 24–25x NTM PE, implying potential total returns of 20–25% IRR even before accounting for M&A upside. Supported by a capable management team with a strong track record of operational and financial execution, ITT presents a compelling opportunity for investors seeking steady industrial growth with multiple levers for margin and value expansion.

Previously we covered a bullish thesis on Graco Inc. (GGG) by Stock Analysis Compilation in December 2024, which highlighted the company’s leading position in fluid handling equipment, strong pricing power, and durable demand from parts and accessories. The company's stock has been trading flat since our coverage. The thesis still stands as Graco remains a durable industrial leader. Longonlybets shares a similar perspective but emphasizes ITT’s operational transformation, higher-margin niche focus, and disciplined M&A strategy.

ITT Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held ITT at the end of the second quarter which was 37 in the previous quarter. While we acknowledge the potential of ITT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.