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With a market cap of $37.3 billion, Ingersoll Rand Inc. (IR) is a global industrial company specializing in mission-critical flow creation technologies. It operates through two segments: Industrial Technologies & Services, offering air compressors, vacuum pumps, and power tools, and Precision & Science Technologies, providing specialized pumps and flow control systems for medical, life sciences, and industrial applications.
Shares of the flow control and compression equipment maker have lagged behind the broader market over the past 52 weeks. IR has risen 10.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 21.6%. However, shares of IR are up 2.6% on a YTD basis, slightly outpacing SPX’s 2.5% gain.
Focusing more closely, the Davidson, North Carolina-based company has underperformed the Industrial Select Sector SPDR Fund’s (XLI) 18.6% return over the past 52 weeks and a nearly 4% YTD gain.
Despite reporting better-than-expected Q3 adjusted earnings of $0.84 on Oct. 31, shares of IR fell 2.1% the next day. The company’s revenue of $1.9 billion missed the estimate, reflecting weaker-than-expected demand, particularly for air compressors. In addition, IR revised its full-year revenue growth forecast downward to 5% - 7%. Inflation-driven material cost increases and persistent supply chain issues further added to investor concerns about ongoing challenges, despite the earnings beat.
For fiscal 2024, which ended in December, analysts expect IR’s EPS to grow 12.3% year-over-year to $3.20. The company's earnings surprise history is promising. It topped the consensus estimates in the last four quarters.
Among the 14 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on seven “Strong Buy” ratings and seven “Holds.”
On Jan. 16, Jefferies analyst Stephen Volkmann reiterated a “Buy” rating on Ingersoll Rand and set a price target of $120.
As of writing, IR is trading below the mean price target of $107.69. The Street-high price target of $124 implies a potential upside of 33.1% from the current price levels.
