Ingersoll Rand Inc. ( IR Quick Quote 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.