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Davidson, North Carolina-based Ingersoll Rand Inc. (IR) provides various mission-critical air, gas, liquid, and solid flow creation technologies services and solutions worldwide. With a market cap of $38.9 billion, it operates through the Industrial Technologies and Services (IT&S), and Precision and Science Technologies (P&ST) segments. The industrial sector giant is expected to announce its Q3 earnings after the market closes on Thursday, Oct. 31.
Ahead of the event, analysts expect Ingersoll Rand to report a profit of $0.79 per share, up 5.3% from $0.75 per share reported in the year-ago quarter. Moreover, the company has surpassed Wall Street’s adjusted EPS projections in each of the past four quarters. Its adjusted EPS for the last reported quarter grew 23.1% year-over-year to $0.80, exceeding the consensus estimates by 8.1%.
For fiscal 2024, analysts expect Ingersoll Rand to report an adjusted EPS of $3.21, up 12.6% from $2.85 in fiscal 2023. In fiscal 2025, its adjusted EPS is expected to grow 7.5% year-over-year to $3.45.
IR stock has surged 24.6% on a YTD basis, outpacing the S&P 500 Index’s ($SPX) 21.5% gains and the Industrial Select Sector SPDR Fund’s (XLI) 19.9% returns during the same time frame.
Despite reporting a massive growth in adjusted EPS, exceeding Wall Street’s expectations, and raising its topline and earnings guidance, Ingersoll Rand’s stock prices tanked 9.1% and maintained a negative momentum for the next two trading sessions after the release of its Q2 earnings on Jul. 31. The company reported a robust 7% year-over-year growth in revenues, reaching $1.8 billion. However, due to a surge in selling and administrative expenses its operating margin contracted by 110 basis points to 15.1% compared to the year-ago quarter. This resulted in a marginal drop in operating income to $271.8 million despite a growth in sales.
Ingersoll Rand has struggled to grow revenues organically, of the 7% growth in revenues 6.9% was contributed by acquisitions. More noticeably its P&ST segment which saw a 10% growth in overall revenues, observed a 1.1% drop in organic revenues and this trend is expected to continue as its second-quarter orders grew 3.6% year-over-year to $1.8 billion but were down 1% organically.
The consensus opinion on IR stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 12 analysts covering the stock, seven recommend a “Strong Buy,” and five advise a “Hold” rating. The mean price target of $105.42 suggests a potential upside of 9.4% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
