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Ingersoll-Rand (IR) Hits 52-Week High, Can the Run Continue?
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Have you been paying attention to shares of Ingersoll-Rand PLC (IR - Free Report) ? Shares have been on the move with the stock up 7.6% over the past month. The stock hit a new 52-week high of $112.57 in the previous session. Ingersoll-Rand PLC has gained 23.1% since the start of the year compared to the 19.1% move for the Zacks Industrial Products sector and the 23.9% return for the Zacks Manufacturing - General Industrial industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on January 30, 2019, Ingersoll-Rand reported EPS of $1.32 versus consensus estimate of $1.28 while it beat the consensus revenue estimate by 1.3%.
For the current fiscal year, Ingersoll-Rand is expected to post earnings of $6.29 per share on $16.42 billion in revenues. This represents a 12.12% change in EPS on a 4.79% change in revenues. For the next fiscal year, the company is expected to earn $6.97 per share on $17.1 billion in revenues. This represents a year-over-year change of 10.79% and 4.13%, respectively.
Valuation Metrics
Ingersoll-Rand may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Ingersoll-Rand has a Value Score of C. The stock's Growth and Momentum Scores are C and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 17.9X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 15.6X versus its peer group's average of 12.9X. Additionally, the stock has a PEG ratio of 1.72. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Ingersoll-Rand currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Ingersoll-Rand fits the bill. Thus, it seems as though Ingersoll-Rand shares could still be poised for more gains ahead.
How Does Ingersoll-Rand Stack Up to the Competition?
Shares of Ingersoll-Rand have been rising, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also impressive, including Metso , DXP Enterprises (DXPE - Free Report) , and Tennant (TNC - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
However, it is worth noting that the Zacks Industry Rank for this group is in the bottom half of the ranking, so it isn't all good news for Ingersoll-Rand. Still, the fundamentals for Ingersoll-Rand are promising, and it still has potential despite being at a 52-week high.
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Ingersoll-Rand (IR) Hits 52-Week High, Can the Run Continue?
Have you been paying attention to shares of Ingersoll-Rand PLC (IR - Free Report) ? Shares have been on the move with the stock up 7.6% over the past month. The stock hit a new 52-week high of $112.57 in the previous session. Ingersoll-Rand PLC has gained 23.1% since the start of the year compared to the 19.1% move for the Zacks Industrial Products sector and the 23.9% return for the Zacks Manufacturing - General Industrial industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on January 30, 2019, Ingersoll-Rand reported EPS of $1.32 versus consensus estimate of $1.28 while it beat the consensus revenue estimate by 1.3%.
For the current fiscal year, Ingersoll-Rand is expected to post earnings of $6.29 per share on $16.42 billion in revenues. This represents a 12.12% change in EPS on a 4.79% change in revenues. For the next fiscal year, the company is expected to earn $6.97 per share on $17.1 billion in revenues. This represents a year-over-year change of 10.79% and 4.13%, respectively.
Valuation Metrics
Ingersoll-Rand may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Ingersoll-Rand has a Value Score of C. The stock's Growth and Momentum Scores are C and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 17.9X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 15.6X versus its peer group's average of 12.9X. Additionally, the stock has a PEG ratio of 1.72. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Ingersoll-Rand currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Ingersoll-Rand fits the bill. Thus, it seems as though Ingersoll-Rand shares could still be poised for more gains ahead.
How Does Ingersoll-Rand Stack Up to the Competition?
Shares of Ingersoll-Rand have been rising, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also impressive, including Metso , DXP Enterprises (DXPE - Free Report) , and Tennant (TNC - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
However, it is worth noting that the Zacks Industry Rank for this group is in the bottom half of the ranking, so it isn't all good news for Ingersoll-Rand. Still, the fundamentals for Ingersoll-Rand are promising, and it still has potential despite being at a 52-week high.