Ingersoll Rand: Strong Buy Recommendation on Robust Financial Performance and Positive Future Outlook

Goldman Sachs analyst Joe Ritchie maintained a Buy rating on Ingersoll Rand (IR – Research Report) yesterday and set a price target of $101.00.

Joe Ritchie has given his Buy rating due to a combination of factors concerning Ingersoll Rand’s recent financial performance and future prospects. In the first quarter, Ingersoll Rand surpassed expectations with an adjusted segment EBITDA of $503 million, which marks an 8% increase compared to the consensus estimates. This success was primarily fueled by significant margin improvements in its Industrial Technologies and Services segment. Despite a dip in the stock price following a decline in organic orders, Ritchie sees the current lower stock price as a buying opportunity, anticipating a rebound as business-to-business ratios are expected to remain strong in the first half of the year, with a forecast for orders to improve in the second quarter.
Moreover, Ritchie’s optimism is bolstered by robust Market Quote Line activity in April and strategic pricing actions, which he believes will support strong incremental margins going into fiscal year 2024. Ingersoll Rand is also seen as well-positioned to continue compounding value, thanks to its consistent execution track record and a robust balance sheet with low net leverage. The anticipated acquisition of ILC Dover, with its significant revenue and EBITDA margins, further contributes to the favorable outlook. Ritchie’s analysis leads to an increased EBITDA forecast for the coming years and a 12-month price target for Ingersoll Rand’s stock, suggesting a potential for notable shareholder returns.

In another report released on April 21, Wells Fargo also maintained a Buy rating on the stock with a $105.00 price target.

Based on the recent corporate insider activity of 46 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of IR in relation to earlier this year.

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Ingersoll Rand (IR) Company Description:

Ingersoll Rand Inc. is a provider of mission-critical flow control and compression equipment and associated aftermarket parts,
consumables, and services. It manufactures compressor, pump, vacuum and blower products in its markets. Its segments are Industrials, Energy,
and Medical. In the Industrials segment, the company designs, manufactures, markets and services a broad range of air compression, vacuum and blower products
across a wide array of technologies and applications. In the Medical segment, it designs, manufactures and markets specialized gas, liquid and precision syringe pumps,
and compressors for use in the medical, laboratory and biotechnology end markets.