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Here's Why You Should Hold Ingersoll Rand (IR) in Your Portfolio
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Ingersoll Rand Inc. (IR - Free Report) is poised to benefit from its presence across diversified end markets, which enables it to mitigate weakness in one market with strength across others.
The company has been witnessing higher orders across its product portfolio of compressors, vacuum and blowers and power tools and lifting within the Industrial Technologies & Services unit. Pricing actions and acquisition benefits augur well for the Precision & Science Technologies segment. For 2023, Ingersoll Rand expects revenue growth of 14-16% year over year, whereas organic revenues are projected to increase 9-11%.
The company intends to strengthen and expand its businesses through buyouts. In October 2023, IR acquired Slovakia-based Oxywise and Canada-based Fraserwoods, thus boosting its capabilities in high-growth, sustainable end markets.
Also, it acquired Howden Roots in August 2023, which expanded its low-pressure compression and vacuum product offerings and added centrifugal compression capabilities. For 2023, the company expects acquisitions to boost revenues by $360 million.
Strong free cash flow generation supports Ingersoll Rand’s shareholder-friendly activities. In the first nine months of 2023, the company’s free cash flow jumped 60.2% year over year to $720.2 million. In the first nine months of 2023, IR paid dividends of $24.3 million and repurchased shares worth $132.8 million.
Image Source: Zacks Investment Research
In the past three months, the Zacks Rank #3 (Hold) company has gained 33.4% compared with the industry’s 21.4% growth.
However, weakness in the life sciences business due to the soft demand environment in oxygen concentration and biopharma end markets has been affecting the performance of the Precision & Science Technologies segment. In third-quarter 2023, the segment’s revenues declined 1.8% on a reported basis and 5.3% organically.
Lately, the company has been subject to rising costs and operating expenses. For instance, its cost of sales increased 12.7% year over year in the first nine months of 2023 due to high raw material costs. Also, selling and administrative expenses surged 14.9% in the same period.
Graco delivered a trailing four-quarter average earnings surprise of 7.2%. In the past 60 days, the Zacks Consensus Estimate for GGG’s 2023 earnings has been unchanged. The stock has rallied 21.8% in the past three months.
Flowserve has a trailing four-quarter average earnings surprise of 27.3%. The consensus estimate for FLS’ 2023 earnings has remained stable in the past 60 days. Shares of the company have gained 14.5% in the past three months.
Parker-Hannifin delivered a trailing four-quarter average earnings surprise of 11.8%. In the past 60 days, the consensus estimate for PH’s fiscal 2024 earnings has improved by 0.4%. The stock has risen 27.5% in the past three months.
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Here's Why You Should Hold Ingersoll Rand (IR) in Your Portfolio
Ingersoll Rand Inc. (IR - Free Report) is poised to benefit from its presence across diversified end markets, which enables it to mitigate weakness in one market with strength across others.
The company has been witnessing higher orders across its product portfolio of compressors, vacuum and blowers and power tools and lifting within the Industrial Technologies & Services unit. Pricing actions and acquisition benefits augur well for the Precision & Science Technologies segment. For 2023, Ingersoll Rand expects revenue growth of 14-16% year over year, whereas organic revenues are projected to increase 9-11%.
The company intends to strengthen and expand its businesses through buyouts. In October 2023, IR acquired Slovakia-based Oxywise and Canada-based Fraserwoods, thus boosting its capabilities in high-growth, sustainable end markets.
Also, it acquired Howden Roots in August 2023, which expanded its low-pressure compression and vacuum product offerings and added centrifugal compression capabilities. For 2023, the company expects acquisitions to boost revenues by $360 million.
Strong free cash flow generation supports Ingersoll Rand’s shareholder-friendly activities. In the first nine months of 2023, the company’s free cash flow jumped 60.2% year over year to $720.2 million. In the first nine months of 2023, IR paid dividends of $24.3 million and repurchased shares worth $132.8 million.
Image Source: Zacks Investment Research
In the past three months, the Zacks Rank #3 (Hold) company has gained 33.4% compared with the industry’s 21.4% growth.
However, weakness in the life sciences business due to the soft demand environment in oxygen concentration and biopharma end markets has been affecting the performance of the Precision & Science Technologies segment. In third-quarter 2023, the segment’s revenues declined 1.8% on a reported basis and 5.3% organically.
Lately, the company has been subject to rising costs and operating expenses. For instance, its cost of sales increased 12.7% year over year in the first nine months of 2023 due to high raw material costs. Also, selling and administrative expenses surged 14.9% in the same period.
Key Picks
We have highlighted three better-ranked stocks from the same space, namely Graco Inc. (GGG - Free Report) , Flowserve Corporation (FLS - Free Report) and Parker-Hannifin Corporation (PH - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Graco delivered a trailing four-quarter average earnings surprise of 7.2%. In the past 60 days, the Zacks Consensus Estimate for GGG’s 2023 earnings has been unchanged. The stock has rallied 21.8% in the past three months.
Flowserve has a trailing four-quarter average earnings surprise of 27.3%. The consensus estimate for FLS’ 2023 earnings has remained stable in the past 60 days. Shares of the company have gained 14.5% in the past three months.
Parker-Hannifin delivered a trailing four-quarter average earnings surprise of 11.8%. In the past 60 days, the consensus estimate for PH’s fiscal 2024 earnings has improved by 0.4%. The stock has risen 27.5% in the past three months.