Ingersoll Rand Executing Well And Better Days Are Still Ahead

A year ago I was neutral on Ingersoll Rand (NYSE:IR) shares, as I liked the multiyear growth story underpinned by the company’s exposure to capital spending and certain ESG touch points like energy and resource efficiency, not to mention the M&A optionality, but didn’t love the valuation. The shares have sold off about 5% or so since then, keeping pace with the broader industrial space and outperforming Atlas Copco (OTCPK:ATLKY).

I’m still not exactly thrilled about the valuation, and I don’t feel that my underlying expectations (high single-digit revenue growth and meaningful margin/FCF margin expansion) are conservative. Still, at a time when short-cycle names are rolling over, I think Ingersoll Rand is in better shape than most over the next five years (and beyond). While I’m tempted to hold out in the hope of a better price on a market sell-off, I don’t think there’s anything wrong with owning a good company (and one likely to outgrow its markets and peers) trading at a reasonable price.

 

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Ingersoll Rand Executing Well And Better Days Are Still Ahead