Ingersoll Rand Inc. IR is benefiting from its solid product portfolio, innovation capabilities and focus on boosting its aftermarket businesses despite cost inflation, supply-chain disruptions and forex crisis.Thank you for reading this post, don't forget to subscribe!
Major factors driving IR
Business Strengths: Solid demand and higher orders should boost the company’s industrial technology and services sector. The company continues to receive high orders across its product portfolio of compressors, vacuums and blowers, and power tools and lifting within the Industrial Technology and Services unit.
For 2023, the company expects segmental revenue to grow 9-11%. Pricing actions and acquired assets are driving the performance of the Precision & Science Technologies segment. The acquisition had a positive impact of 2.5% on the unit’s revenue in the second quarter of 2023. The company expects Precision & Science Technologies revenue to grow by 5-7% in 2023.
Expansion Efforts: Ingersoll Rand is consolidating its business through acquisitions. In August 2023, the company completed the acquisition of Howden Roots for approximately $300 million. The acquisition expanded IR’s low-pressure compression and vacuum product offerings and added centrifugal compression capabilities. Roots is a part of IR’s Industrial Technology and Services segment.
In January 2023, the company completed the acquisition of SPX FLOW’s air treatment business, which boosted its core compressor product offering through a complementary product portfolio of energy-efficient compressed air dryers, filters and other consumables. The air treatment business is a part of IR’s Industrial Technology and Services segment.
Rewards to Shareholders: The company continues to increase shareholder value through dividend payments. In the first six months of 2023, the company paid dividends of $16.2 million and repurchased shares worth $132.8 million. In 2022, IR returned $294 million to shareholders through dividends and share buybacks.
In light of the above positives, we believe investors should hold on to IR stock for now, as suggested by its current Zacks Rank #3 (Hold). IR shares are up 41.1% in a year, outperforming the industry’s 21.5% rise.
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Stocks to consider
Some of the better ranked companies in the Industrial Products sector are discussed below:
Axon Enterprise, Inc. AXON currently sports a Zacks Rank #1 (Strong Buy). you can see The full list of today’s Zacks #1 Rank stocks here,
The company delivered an average trailing four-quarter earnings surprise of about 60.2%. Over the past 60 days, Exxon’s earnings estimates for 2023 have increased by 13.8%. The stock is up 72% in the past year.
Applied Industrial Technologies, Inc. AIT currently sports a Zacks Rank of 1 and a trailing four-quarter earnings surprise of 15% on average.
AIT’s earnings estimates for fiscal year 2024 (ending June 2024) have moved 1.6% over the last 60 days. Shares of Applied Industrial have gained 44.9% in the last year.
Caterpillar Inc., CAT currently holds a Zacks Rank #2 (Buy). CAT’s earnings surprise over the last four quarters averaged 18.5%.
Over the past 60 days, Caterpillar’s earnings estimates for 2023 have moved up 2.2%. The stock is up 50.9% in the last year.
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Caterpillar Inc. (CAT): Free Stock Analysis Report
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