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On Tuesday, Stifel analysts revised their price target for Ingersoll-Rand shares (NYSE:IR), decreasing it to $94.00 from the previous $100.00, while continuing to recommend a Hold rating on the stock. Currently trading at $85.72, near its 52-week low of $83.72, the company has caught the attention of analysts, with InvestingPro data showing 9 analysts revising their earnings expectations downward for the upcoming period. The adjustment followed the company’s fourth-quarter earnings, which were consistent with expectations, and a 2025 outlook that suggested a slight dip in revenue forecasts but aligned with predictions for EBITDA.
Ingersoll-Rand’s final quarter of 2024 revealed that margins in the Precision and Science Technologies (PST) segment had contracted by 250 basis points. This downturn was, however, balanced by a reduction in corporate expenses. InvestingPro data shows the company maintains a healthy gross profit margin of 43.81% and a strong current ratio of 2.29, indicating solid financial health with a "GOOD" overall score. The company’s organic order rates remained unchanged, with strong performance in Latin America, the Middle East, India, and the Asia-Pacific region, excluding China. This strength was counterbalanced by weaker results in Europe and China.
The Stifel analyst noted that despite certain areas showing improvement and confidence in management’s ability to capitalize on the IRX initiative to achieve growth beyond market averages, the current order rates do not indicate an imminent market recovery for Ingersoll-Rand.
The IRX strategy is part of Ingersoll-Rand’s approach to drive operational excellence and growth. The company’s efforts through this initiative are aimed at outpacing market growth, even as the order rates currently do not point to a short-term resurgence in the sector.
In summary, while Ingersoll-Rand met its fourth-quarter expectations and the EBITDA guidance for 2025 remains on target, the forecast for revenue is somewhat below initial estimates. The company’s mixed regional performance and the current order trends have led Stifel to adjust its price target accordingly, while maintaining a neutral stance on the stock’s rating. Trading at a P/E ratio of 41.61, InvestingPro analysis suggests the stock is currently overvalued, with additional insights available in the comprehensive Pro Research Report, one of 1,400+ detailed company analyses available to subscribers.
In other recent news, Ingersoll Rand Inc. reported its fourth-quarter earnings, which narrowly missed analyst estimates, with an adjusted earnings per share of $0.84, slightly below the consensus estimate of $0.85. The company’s revenue for the quarter was $1.9 billion, just shy of analysts’ expectations of $1.93 billion, but still marked a 4% increase compared to the same quarter last year.
For the upcoming year, Ingersoll Rand has provided guidance for adjusted earnings per share ranging from $3.38 to $3.50, closely aligning with the consensus estimate of $3.46. The company also anticipates a revenue growth of 3% to 5%.
Ingersoll Rand’s Industrial Technologies and Services segment reported a steady revenue of $1.51 billion for the quarter, while the Precision and Science Technologies segment saw a significant revenue increase of 24% to $388 million. The company’s cash flow from operating activities was $526 million during the quarter, with free cash flow of $491 million.
Ingersoll Rand also made notable strides in its inorganic growth strategy, deploying $200 million for acquisitions in the fourth quarter. These recent developments reflect the company’s positive operational guidance for the upcoming year.
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