Ingersoll Rand Inc. IR continues to see higher orders across its product portfolio of industrial vacuums and blowers, along with stable orders for compressors, which is driving the Industrial Technologies & Services segment. Also, growth in short-cycle orders, along with strong book-and-ship orders, has been a tailwind for the Precision and Science Technologies segment.
Driven by strength across its businesses, management expects 2024 revenues to increase 5-7% from the year-ago level. The company forecasts adjusted earnings to be in the range of $3.28-$3.34 per share compared with $2.96 reported in 2023.
IR completed the acquisition of Air Power Systems Co. (“APSCO”), Blutek s.r.l. (Blutek) and UT Pumps & Systems Private Limited (UT Pumps) in October 2024. The buyout of APSCO will enable the company to boost its position in the dry and liquid bulk markets with energy-efficient solutions.
With the Blutek buyout, Ingersoll Rand will likely enhance its competitiveness in high-specification projects by adding technology, expertise and aftermarket opportunities in fast-growing markets like biogas and carbon capture. Also, the acquisition of UT Pumps will enhance IR’s product portfolio with new pump technology. In third-quarter 2024, acquisitions contributed 8.9% to the company’s total revenues.
Management is focused on rewarding shareholders through dividend payouts and share repurchases. In the first nine months of 2024, it paid out dividends of $24.2 million and repurchased shares worth $198.2 million. Also, in April 2024, its board of directors approved an additional $1 billion increase to the share repurchase authorization.
IR’s Zacks Rank & Price Performance
Image Source: Zacks Investment Research
In the past three months, the Zacks Rank #3 (Hold) company’s shares have risen 20.5% compared with the industry’s 15.7% growth.
Despite the positives, Ingersoll Rand has been grappling with escalating costs and expenses over time. Its cost of sales increased 11.2% year over year in 2023 while selling and administrative expenses rose 16.1%. The trend continued in the first nine months of 2024, with selling and administrative expenses increasing 7.5%.
Ingersoll Rand’s high debt level remains a concern for its profitability. Exiting third-quarter 2024, the company’s long-term debt was $4.8 billion, higher than $2.7 billion at 2023-end. Also, interest expenses in the first nine months of 2024 increased 27% year over year to $151.4 million.
Key Picks
Some better-ranked stocks from the same space are presented below.
Graham Corporation GHM sports a Zacks Rank #1 (Strong Buy) currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
GHM delivered a trailing four-quarter average earnings surprise of 101.9%. In the past 60 days, the Zacks Consensus Estimate for its fiscal 2025 earnings has increased 8.4%.
Generac Holdings GNRC presently carries a Zacks Rank #2 (Buy). GNRC delivered a trailing four-quarter average earnings surprise of 10.8%. In the past 60 days, the consensus estimate for Generac Holdings’ 2024 earnings has increased 5.1%.
RBC Bearings Incorporated RBC presently carries a Zacks Rank of 2. RBC delivered a trailing four-quarter average earnings surprise of 2.5%. In the past 60 days, the Zacks Consensus Estimate for its 2024 earnings has increased 1.3%.
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