Goldman analyst Joe Ritchie downgraded Illinois Tool Works to Sell and lowered its price target to $121 from $123 saying he prefers to own stocks with more cyclical exposure, under-earnings potential, and benefits from inflation. Ritchie expects shares to underperform in the medium-term, particularly given its elevated multiple, limited margin upside, and lack of benefits from tax reform.

Stifel raised the firm's price target on Illinois Tool Works to $259 from $258 and keeps a Hold rating on the shares. In a Q1 preview for the diversified industrials group, the firm says it is "generally fairly neutral on stocks under our coverage" with an expectation that companies will be seeing improving demand fundamentals with improving short cycle and waning inventory destocking, offset by the strong performance of the stocks during the quarter. In general, the firm is expecting management commentary to be more positive on the second half, while maintaining a relatively cautious approach to guidance, the analyst tells investors in the preview.