Why Ingersoll Rand (IR) Shares Fell Despite Raising 2024 Guidance and Beating Earnings Estimates

• Ingersoll Rand recently reported a strong quarter, surpassing analyst estimates for revenue and adjusted operating income, and raised its full-year guidance for revenue, adjusted EBITDA, and adjusted EPS.
• Despite beating expectations and improving its outlook, investor concerns about profitability continue to influence market sentiment and test key support and resistance levels for the stock.
• We'll examine how Ingersoll Rand's improved full-year guidance could impact its long-term investment narrative around innovation and recurring revenue streams.

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Ingersoll Rand Investment Narrative Recap

To be a shareholder in Ingersoll Rand, you need to believe in the company’s ability to unlock long-term value through innovation and growing recurring revenue, even as it navigates risks around order growth and profitability. The recent quarter’s strong revenue and raised guidance support the company’s story, but short-term sentiment remains cautious as investors continue to focus on margin pressure, meaning the most important near-term catalyst, sustained profitability improvement, remains under a cloud. The largest risk, persistent muted organic order growth and market maturity in key segments, has not been displaced by this update.

Among recent announcements, Ingersoll Rand’s ongoing capital allocation to M&A stands out, with management reiterating bolt-on acquisitions as a priority. This is particularly relevant as the company seeks new sources of growth and operational leverage, which directly ties back to the importance of stable and expanding profitability as a near-term driver for sentiment and valuation. Yet while improved guidance is promising, investors should be aware that ongoing concerns over the sustainability of organic growth continue to loom...

Read the full narrative on Ingersoll Rand (it's free!)

Ingersoll Rand's outlook anticipates $8.8 billion in revenue and $1.4 billion in earnings by 2028. This projection is based on an annual revenue growth rate of 6.1% and an increase in earnings of approximately $877 million from current earnings of $522.6 million.

Uncover how Ingersoll Rand's forecasts yield a $90.00 fair value, a 17% upside to its current price.

Exploring Other Perspectives

Four fair value estimates from the Simply Wall St Community place Ingersoll Rand’s worth between US$86.92 and US$121.47, showcasing a wide range of independent analyses. Given concerns about muted organic growth, you may want to explore how different market participants are assessing the company's longer-term potential.

Explore 4 other fair value estimates on Ingersoll Rand - why the stock might be worth as much as 58% more than the current price!

Build Your Own Ingersoll Rand Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Ingersoll Rand research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Ingersoll Rand research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Ingersoll Rand's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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