On Monday, Baird, a financial services firm, adjusted its price target for Ingersoll-Rand (NYSE:IR), a diversified industrial manufacturing company. The price target was lowered to $109.00 from the previous $114.00. Despite the reduction, Baird retained an Outperform rating on the company's shares.
The adjustment follows Ingersoll-Rand's recent quarterly results, which slightly exceeded expectations. This performance was attributed to better-than-anticipated contributions from acquisitions and effective margin execution.
While order books remain stable, indicating healthy leading indicators, the firm noted that the conversion of these orders into sales is experiencing delays due to customer site readiness and capacity challenges.
Ingersoll-Rand also provided updated guidance, which has been narrowed. The implied adjusted EBITDA and EPS for the fourth quarter were modestly below the consensus. However, Baird believes these targets are attainable and could potentially be surpassed due to certain upside levers.
Looking forward into early 2025, Baird's analysis suggests that Ingersoll-Rand may experience subdued organic revenue trends in the first half of the year, with expectations of a growth recovery in the second half.
This anticipated improvement is based on easier comparables, potential benefits from mergers and acquisitions, and continued margin execution. Baird reaffirmed its view of Ingersoll-Rand as a core holding and anticipates that the company's estimates will reaccelerate, driven by key catalysts.
In other recent news, Ingersoll Rand (NYSE:IR) reported strong third-quarter results for 2024, demonstrating resilience with record orders and revenue growth despite a challenging macroeconomic environment.
The company saw a 10% increase in total orders and a 7% rise in revenue year-over-year. Adjusted EBITDA rose by 15% to $533 million, and EPS grew by 9% to $0.84. The company's free cash flow remained solid at $374 million, maintaining a 20% margin.
However, Ingersoll Rand adjusted its full-year 2024 revenue growth guidance to 5%-7%, slightly down from prior expectations due to project delays linked to customer readiness and other factors. Despite these challenges, the Industrial Technologies and Services segment achieved record adjusted EBITDA margins of 30.7%.
In addition to these developments, Ingersoll Rand expects revenue growth of 5% to 7% for the full year 2024 and projects adjusted EBITDA between $2.01 billion and $2.04 billion, with adjusted EPS expected to be between $3.28 and $3.34. The company remains optimistic about future growth, supported by a growing backlog and continued M&A activity.
InvestingPro Insights
To complement Baird's analysis, InvestingPro data offers additional insights into Ingersoll-Rand's financial position. The company's market capitalization stands at $37.87 billion, reflecting its significant presence in the industrial manufacturing sector. Ingersoll-Rand has demonstrated strong financial performance, with a revenue of $7.16 billion over the last twelve months as of Q3 2023, showing a growth of 7.18% during this period.
InvestingPro Tips highlight that Ingersoll-Rand has been profitable over the last twelve months, aligning with Baird's positive outlook. The company's liquid assets exceed short-term obligations, indicating a solid financial position that could support its growth strategies and potential acquisitions mentioned in the article.
Another relevant InvestingPro Tip notes that Ingersoll-Rand operates with a moderate level of debt, which could provide flexibility for future investments and expansion plans. This financial stability may contribute to the company's ability to navigate the anticipated subdued organic revenue trends in early 2025, as discussed by Baird.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Ingersoll-Rand, providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.