There is a Glenview, Illinois company with a name that leads one to believe it's in the business of making tools . . . and it is. There is rather more to it, though. The firm actually consists of about 750 decentralized business units in 49 countries, and tools are just the beginning.

Illinois Tool Works (NYSE: ITW) is a diversified manufacturer of highly engineered components, industrial systems and consumables. The company's Engineered Products segment provides the construction, automotive and consumer durables markets with plastic and metal components, trusses, fasteners, adhesives, cross-laminated plastic films and laminate flooring products. The Specialty Systems segment designs and manufactures machinery, packaging systems, tools, welding products, electronic assembly materials, cooking equipment and related consumables. General Electric (NYSE: GE) is among the firm's major competitors.

ITW investors were pleased last week, when Merrill Lynch (NYSE: MER) upgraded the stock from "neutral" to "buy." The broker said the base business growth rate is positioned to begin to accelerate, due to easier comparisons and on-going strength from international end markets. Also, the company affirmed guidance ranges. It still sees Q2 EPS of 86-90 cents (88 cent consensus) and FY07 EPS of $3.27-$3.39 ($3.33 consensus). The stock popped into a bullish "pennant" consolidation pattern on the news. Prices frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.