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Here's Why Ingersoll (IR) Is a Worthy Investment Pick for 2022
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Ingersoll Rand Inc. (IR - Free Report) specializes in providing industrial and mission-critical flow-creation technologies. Its strong fundamentals and healthy financial performances have helped drive its shares by 34.7% so far in 2021. Solid growth opportunities support the upward revision in the company’s projection, and the consensus estimate for earnings.
The Davidson, NC-based company presently carries a Zacks Rank #2 (Buy). The stock belongs to the Zacks Manufacturing - General Industrial industry, which comes under the ambit of the Zacks Industrial Products sector. The industry is in the top 43% (with a rank of 110) of more than 250 Zacks industries.
Year to date, the industry has rallied 8.8%. The S&P 500 has risen 28.6% during the same period and the Zacks Industrial Products sector has grown 13.5%.
Image Source: Zacks Investment Research
What’s Making IR An Attractive Investment Option for 2022?
Ingersoll’s results for the first three quarters of 2021 were impressive, with earnings beating the Zacks Consensus Estimate on all occasions. Then again, the bottom line expanded from 45 cents reported in the first quarter to 46 cents in the second quarter and 57 cents in the third quarter. Notably, the Zacks Consensus Estimate for fourth-quarter 2021 earnings is pegged at 61 cents.
A number of factors are favoring Ingersoll’s prospects for the fourth quarter of 2021 (likely to be reported on Feb 28, 2022) and 2022. Among them are the company’s solid product offerings, its dedicated workforce, and exposure in diversified end markets. Focus on innovation, expansion of the aftermarket business, and investments in e-commerce, digital, and IoT space are likely to favor Ingersoll.
Healthy demand for Milton Roy, vacuum pumps, compressors, blowers, and other products are likely to be beneficial, going forward. Buyouts will also boost the company’s revenue generation capabilities. Ingersoll added Tuthill Vacuum and Blower Systems in February 2021, Maximus in August, Seepex GmbH in September, Air Dimensions Inc. in October, and Tuthill Pump Group in December.
Divestments have added advantages, as it helps free resources from unprofitable/non-core businesses and directs the same to core businesses. Ingersoll divested a majority stake of its High Pressure Solutions segment in April 2021, and sold-off its Specialty Vehicle Technologies segment in June. Rewarding shareholders handsomely through share buybacks and dividend payments add to the company’s attractiveness.
For 2021, Ingersoll anticipates year-over-year revenue growth in high-teens, up from the mid-teens stated earlier. Organic sales are predicted to grow in the low-double digits for both Industrial Technologies & Services, and Precision & Science Technologies segments. Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) are anticipated to be $1.175-$1.195 billion, up from $1.15-$1.18 billion stated previously.
The Zacks Consensus Estimate for Ingersoll’s earnings per share is pegged at $2.01 for 2021 and $2.33 for 2022, suggesting year-over-year growth of 29.7% and 15.9%, respectively. Then again, the consensus estimate for 2021 marks an 11.7% increase from the 60-day-ago figure, while that for 2022 reflects an increase of 7.9% in the same period.
Its earnings surprise in the last reported quarter was 30.49%. The same for the last four quarters was 37.54%, on average.
In the past 60 days, Helios’ earnings estimates have increased 7.9% for 2021 and 9.6% for 2022. HLIO’s shares have gained 25.3% in the past three months.
Graco Inc. (GGG - Free Report) reported lower-than-expected results in the last reported quarter, with earnings lagging estimates by 10.94%. Its earnings surprise in the last four quarters was 6.58%, on average. The company presently carries a Zacks Rank #2.
Graco’s earnings estimates showed no movement for 2021 and increased 1.9% for 2022 in the past 60 days. GGG’s shares have gained 15% in the past three months.
Welbilt, Inc.’s results in the last reported quarter were impressive, with earnings surpassing estimates by 40.00%. Its last four quarters’ average earnings surprise was 172.50%. The company presently carries a Zacks Rank #2.
Welbilt’s earnings estimates have increased 8.6% for 2021 and 5.9% for 2022 in the past 60 days. WBT’s shares have gained 2.5% in the past three months.
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Here's Why Ingersoll (IR) Is a Worthy Investment Pick for 2022
Ingersoll Rand Inc. (IR - Free Report) specializes in providing industrial and mission-critical flow-creation technologies. Its strong fundamentals and healthy financial performances have helped drive its shares by 34.7% so far in 2021. Solid growth opportunities support the upward revision in the company’s projection, and the consensus estimate for earnings.
The Davidson, NC-based company presently carries a Zacks Rank #2 (Buy). The stock belongs to the Zacks Manufacturing - General Industrial industry, which comes under the ambit of the Zacks Industrial Products sector. The industry is in the top 43% (with a rank of 110) of more than 250 Zacks industries.
Year to date, the industry has rallied 8.8%. The S&P 500 has risen 28.6% during the same period and the Zacks Industrial Products sector has grown 13.5%.
What’s Making IR An Attractive Investment Option for 2022?
Ingersoll’s results for the first three quarters of 2021 were impressive, with earnings beating the Zacks Consensus Estimate on all occasions. Then again, the bottom line expanded from 45 cents reported in the first quarter to 46 cents in the second quarter and 57 cents in the third quarter. Notably, the Zacks Consensus Estimate for fourth-quarter 2021 earnings is pegged at 61 cents.
A number of factors are favoring Ingersoll’s prospects for the fourth quarter of 2021 (likely to be reported on Feb 28, 2022) and 2022. Among them are the company’s solid product offerings, its dedicated workforce, and exposure in diversified end markets. Focus on innovation, expansion of the aftermarket business, and investments in e-commerce, digital, and IoT space are likely to favor Ingersoll.
Healthy demand for Milton Roy, vacuum pumps, compressors, blowers, and other products are likely to be beneficial, going forward. Buyouts will also boost the company’s revenue generation capabilities. Ingersoll added Tuthill Vacuum and Blower Systems in February 2021, Maximus in August, Seepex GmbH in September, Air Dimensions Inc. in October, and Tuthill Pump Group in December.
Divestments have added advantages, as it helps free resources from unprofitable/non-core businesses and directs the same to core businesses. Ingersoll divested a majority stake of its High Pressure Solutions segment in April 2021, and sold-off its Specialty Vehicle Technologies segment in June. Rewarding shareholders handsomely through share buybacks and dividend payments add to the company’s attractiveness.
For 2021, Ingersoll anticipates year-over-year revenue growth in high-teens, up from the mid-teens stated earlier. Organic sales are predicted to grow in the low-double digits for both Industrial Technologies & Services, and Precision & Science Technologies segments. Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) are anticipated to be $1.175-$1.195 billion, up from $1.15-$1.18 billion stated previously.
The Zacks Consensus Estimate for Ingersoll’s earnings per share is pegged at $2.01 for 2021 and $2.33 for 2022, suggesting year-over-year growth of 29.7% and 15.9%, respectively. Then again, the consensus estimate for 2021 marks an 11.7% increase from the 60-day-ago figure, while that for 2022 reflects an increase of 7.9% in the same period.
Ingersoll Rand Inc. Price and Consensus
Ingersoll Rand Inc. price-consensus-chart | Ingersoll Rand Inc. Quote
Other Stocks to Consider
Three other top-ranked stocks in the industry are discussed below.
Helios Technologies, Inc. (HLIO - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Its earnings surprise in the last reported quarter was 30.49%. The same for the last four quarters was 37.54%, on average.
In the past 60 days, Helios’ earnings estimates have increased 7.9% for 2021 and 9.6% for 2022. HLIO’s shares have gained 25.3% in the past three months.
Graco Inc. (GGG - Free Report) reported lower-than-expected results in the last reported quarter, with earnings lagging estimates by 10.94%. Its earnings surprise in the last four quarters was 6.58%, on average. The company presently carries a Zacks Rank #2.
Graco’s earnings estimates showed no movement for 2021 and increased 1.9% for 2022 in the past 60 days. GGG’s shares have gained 15% in the past three months.
Welbilt, Inc.’s results in the last reported quarter were impressive, with earnings surpassing estimates by 40.00%. Its last four quarters’ average earnings surprise was 172.50%. The company presently carries a Zacks Rank #2.
Welbilt’s earnings estimates have increased 8.6% for 2021 and 5.9% for 2022 in the past 60 days. WBT’s shares have gained 2.5% in the past three months.