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Ingersoll (IR) Stock Rises 15% in 3 Months: What's Driving It?

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Shares of Ingersoll Rand Inc. (IR - Free Report) have jumped an impressive 15.2% in the past three months. The stock’s attractiveness is enhanced by the company’s solid fundaments, buyout activities, shareholder rewards and solid earnings prospects. It presently carries a Zacks Rank #2 (Buy).

The company specializes in providing industrial and mission-critical flow creation technologies. It belongs to the Zacks Manufacturing - General Industrial industry, which is in the top 21% (with a rank of 52) of more than 250 Zacks industries. It is based in Davidson, NC, and has a market capitalization of $23 billion.

In the past three months, the industry has declined 2.9%. The S&P 500 has gained 5.1% during the same period and the Zacks Industrial Products sector has inched up 0.2%.


Zacks Investment Research
Image Source: Zacks Investment Research


Factors Influencing the Stock

In the past three months, Ingersoll delivered impressive results for the second quarter of 2021. Its earnings surpassed the Zacks Consensus Estimate by 15.00%, while sales beat in the quarter was 7.49%. On a year-over-year basis, the bottom line grew 58.6% on the back of revenue growth and margin improvement.

In addition to solid financial performance, Ingersoll’s exposure in diversified end markets, its solid product offerings, focus on innovation, cost-saving actions and healthy aftermarket businesses are some other tailwinds for the quarters ahead. Its investments in boosting e-commerce businesses and digital capabilities are beneficial as well.

For 2021, Ingersoll anticipates revenue growth to be in the mid-teens on a year-over-year basis, as compared with low-double-digit growth stated earlier. Organic sales are expected to increase in low-double digits versus high-single digits stated previously. The company’s commitment toward returning values to shareholders raises its appeal. Recently, its board of directors approved a quarterly dividend program and a $750-million share buyback program. The company will begin paying a quarterly dividend of 2 cents per share from fourth-quarter 2021.

Regarding buyout actions, Ingersoll acquired Seepex GmbH, Maximus, and Tuthill Vacuum and Blower Systems so far in 2021. Among these, the latest acquisition is of Seepex GmbH. Ingersoll acquired Seepex for €431.5 million in cash, and it is now part of its Precision and Science Technologies segment. As communicated with the second-quarter 2021 results, Ingersoll anticipates mergers/acquisitions to boost its sales by $60 million in 2021.

The Zacks Consensus Estimate for the company’s earnings per share is pegged at $1.86 for 2021 and $2.14 for 2022, marking increases of 9.4% and 7.5% from the respective 60-day-ago figures. The consensus estimate for third-quarter earnings improved from 44 cents per share to 49 cents. Such upward revisions in earnings estimates are reflective of healthy operating conditions for the company.

Ingersoll Rand Inc. Price and Consensus


Ingersoll Rand Inc. Price and Consensus

Ingersoll Rand Inc. price-consensus-chart | Ingersoll Rand Inc. Quote

Ingersoll’s Performance Versus Industry Players

Ingersoll’s performance in the past three months has been better than Altra Industrial Motion Corp. (AIMC - Free Report) , DXP Enterprises, Inc. (DXPE - Free Report) and Applied Industrial Technologies, Inc. (AIT - Free Report) . The companies belong to the same industry as Ingersoll. In the past three months, Altra Industrial’s shares have dipped 14.1%, DXP Enterprises fell 14.4% and Applied Industrial declined 8.2%.

DXP Enterprises currently sports a Zacks Rank #1 (Strong Buy), while both Altra Industrial and Applied Industrial carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.