ITT shares surge on Q4 earnings beat, 10% dividend hike
Industrial manufacturer delivers $555M free cash flow with 14.1% margin, exceeds analyst estimates
ITT Inc shares jumped Thursday after the industrial manufacturer reported fourth-quarter results that beat Wall Street expectations, delivered exceptional cash flow performance, and announced a double-digit dividend increase.
The White Plains, New York-based company reported adjusted earnings per share of $1.85 for the fourth quarter, topping analyst estimates. Revenue reached $1.054 billion, representing 13.5% year-over-year growth with 8.6% organic growth, as demand remained robust across the company's engineered components and technology solutions serving energy, transportation, and industrial markets.
Perhaps most impressively, ITT generated $555 million in free cash flow for the full year, up 27% from the prior year, with a free cash flow margin of 14.1%. Operating cash flow increased 19% to $669 million for 2025, achieving a 17% operating cash flow margin.
"2025 was a milestone," said Luca Savi, ITT's chief executive officer and president. "We delivered exceptional cash flow and outstanding profitable growth, all in all a strong start to the next ITT chapter as outlined at Capital Markets Day."
The strong performance enabled ITT to increase its quarterly dividend by 10% to $0.386 per share, marking the third consecutive year of double-digit dividend increases. The dividend is payable on April 6, 2026 to shareholders of record as of March 6, 2026. Since 2020, ITT has delivered a 15% compounded annual growth rate in its dividend.
Looking ahead, the company issued guidance for the first quarter of 2026 that projects revenue growth of approximately 11%, including 5% organic growth. ITT expects adjusted EPS between $1.68 and $1.72, with an adjusted operating margin greater than 18%, representing approximately 100 basis points of expansion.
The free cash flow performance has already achieved targets ITT set for 2030 at its Capital Markets Day last year. "Thanks to the ITT team's hard work, we grew free cash flow 27% and delivered 14% free cash flow margin for the year, already at the level of performance we targeted for 2030 at Capital Markets Day," Savi said.
Analysts maintain a largely positive outlook on the stock. The consensus rating stands at "Buy" with an average price target of $210.78, suggesting approximately 14% upside from current levels, according to market data. ITT's shares have gained significant ground over the past year, trading well above their 200-day moving average of $167.24 as the company executes on its strategic initiatives.
The industrial machinery sector has faced headwinds from macroeconomic uncertainty and slowing demand in some end markets, but ITT's diversified portfolio and focus on high-margin engineered components have provided resilience. The company's ability to expand operating margins while delivering strong cash flow conversion has positioned it favorably relative to peers.
ITT's performance reflects broader strength in the industrial sector, as companies with exposure to critical infrastructure, energy transition, and transportation themes continue to attract investor interest despite broader market volatility.