Ingersoll Rand
IR
$84.78
+7.13%
Ingersoll Rand Inc. is a global industrial company that provides mission-critical flow creation and industrial solutions, including compression, vacuum, blower, and fluid management systems, serving diverse end markets such as industrial manufacturing, medical, and energy. Formed through the merger of Gardner Denver and Ingersoll Rand's industrial segment, the company holds a strong competitive position as a diversified industrial technology provider with a broad portfolio of well-known brands. The current investor narrative centers on the company's ability to sustain mid-single-digit organic growth, expand margins through its 'Ingersoll Rand Execution Excellence' (IRX) operational framework, and deploy capital effectively via acquisitions and share repurchases, while navigating a mixed macroeconomic environment.…
IR
Ingersoll Rand
$84.78
Investment Opinion: Should I buy IR Today?
Rating: Hold. Ingersoll Rand is a quality industrial company with improving fundamentals, but the stock's recent underperformance and elevated trailing valuation warrant a cautious stance. The consensus analyst rating is Buy with an average target of $93.50, implying 18.1% upside, but the stock needs to demonstrate consistent execution to close the gap.
Supporting evidence: Revenue growth accelerated to 7.6% YoY in Q1 2026, gross margin improved to 42.9% from 38.5% TTM, and free cash flow of $1,161M TTM provides strong financial flexibility. The forward P/E of 20.5x is reasonable relative to the industry average of ~18x, and the consensus EPS estimate of $4.60 supports this multiple. However, the trailing P/E of 54.3x is a red flag, and the stock's 1-year return of -8.3% versus the S&P 500's +20.9% indicates persistent selling pressure.
Risks & Conditions: The Hold rating would upgrade to Buy if the stock breaks above its 200-day moving average and forward P/E compresses below 18x, or if revenue growth sustains above 7% and margins continue to expand. It would downgrade to Sell if revenue growth decelerates below 5% or if the company issues negative guidance. Overall, the stock appears fairly valued relative to forward earnings but overvalued on a trailing basis, making it a hold for now.
Sign up to view all
IR 12-Month Price Forecast
Ingersoll Rand's fundamentals are improving with accelerating revenue growth and expanding margins, but the stock's technical weakness and elevated trailing valuation create a mixed outlook. The base case of gradual improvement to the analyst average target of $93.50 is most likely, offering 18% upside. However, the wide target range and high uncertainty about earnings recovery suggest limited conviction. The neutral stance reflects balanced risk/reward: the stock could appreciate if execution continues, but any misstep could lead to significant downside given the high trailing P/E. Upgrades would require sustained margin expansion and positive earnings surprises; downgrades would follow a macro downturn or earnings miss.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Ingersoll Rand's 12-month outlook, with a consensus price target around $93.54 and implied upside of +10.3% versus the current price.
Average Target
$93.54
0 analysts
Implied Upside
+10.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$80 - $115
Analyst target range
The stock is covered by 14 analysts, with a consensus recommendation of 'Buy' (mean rating 2.07 on a 1-5 scale where 1 is Strong Buy). The average target price is $93.50, implying 18.1% upside from the current price of $79.14. The distribution shows a bullish lean, with no sell ratings and a majority of buy/overweight ratings. Recent ratings from major firms (Morgan Stanley, Barclays, Wells Fargo, Citigroup) have been maintained at Overweight or Equal Weight, indicating stable sentiment. The target range spans from $80.00 (low) to $115.00 (high), representing a 44% spread between the low and high. The high target of $115 assumes successful margin expansion through IRX, sustained revenue growth, and multiple expansion as the market rewards consistent execution. The low target of $80 suggests risks from macroeconomic slowdown, competitive pressure, or failure to achieve margin targets. The wide spread indicates high uncertainty about the pace of earnings recovery. The consensus EPS estimate of $4.60 for the current year implies a forward P/E of 17.2x at the average target, which is reasonable relative to historical averages. The lack of recent downgrades and consistent 'Overweight' ratings from Barclays and Wells Fargo support a cautiously optimistic outlook.
Bulls vs Bears: IR Investment Factors
Ingersoll Rand presents a mixed picture: strong operational momentum with accelerating revenue growth, expanding margins, and a healthy balance sheet, but the stock has underperformed significantly and trades at a high trailing P/E. The bull case rests on sustained execution of the IRX framework driving margin expansion and earnings growth, justifying the forward P/E of 20.5x. The bear case centers on macroeconomic headwinds compressing multiples and the risk that elevated expectations are not met. The single most important tension is whether the company can deliver the earnings growth implied by the forward P/E—if EPS reaches $4.60, the stock is reasonably valued; if not, the trailing P/E of 54x leaves substantial downside. Currently, the evidence slightly favors the bull case given improving fundamentals and analyst support, but the stock's technical weakness warrants caution.
Bullish
- Strong Revenue Growth Acceleration: Q1 2026 revenue grew 7.6% YoY to $1,847M, accelerating from 6.0% in Q4 2025 and 4.2% in Q3 2025, indicating improving demand across industrial and precision technologies segments.
- Significant Margin Expansion Potential: Gross margin improved to 42.9% in Q1 2026 from 38.5% TTM, driven by pricing and cost controls. Operating margin of 15.7% shows operational leverage, with room to reach the 19.2% achieved in Q3 2025.
- Healthy Balance Sheet and Cash Flow: Debt-to-equity of 0.48x and current ratio of 2.06x indicate low financial risk. Free cash flow TTM of $1,161M provides ample capacity for dividends ($8M quarterly) and share repurchases ($90M in Q1 2026).
- Attractive Forward Valuation: Forward P/E of 20.5x is reasonable given expected EPS growth to $4.60, representing a 14% premium to the industry average of ~18x, justified by superior gross margins and consistent FCF generation.
Bearish
- Elevated Trailing P/E Signals Risk: Trailing P/E of 54.3x is near the top of its historical range (21x-54x), reflecting depressed earnings from prior restructuring. Any earnings miss could trigger multiple compression.
- Persistent Stock Underperformance: The stock is down 8.3% over the past year vs. S&P 500 +20.9%, with negative relative strength across all periods. The 1-year relative strength of -29.2% indicates sustained selling pressure.
- Macroeconomic Sensitivity and Cyclicality: Beta of 1.168 implies higher volatility than the market. A slowdown in industrial production or capital spending could pressure revenue growth, especially given exposure to manufacturing and energy end markets.
- Moderate ROE and Margin Volatility: ROE of 5.8% is modest for an industrial company. Operating margin has fluctuated from 4.0% (Q2 2025) to 19.2% (Q3 2025), indicating earnings sensitivity to restructuring and one-time items.
IR Technical Analysis
The stock is in a sustained downtrend over the past year, with a 1-year price change of -8.3%, significantly underperforming the S&P 500's +20.9% gain. The current price of $79.14 sits at 78.4% of its 52-week range (low $68.07, high $100.96), positioning it closer to the lows than the highs, suggesting bearish sentiment and potential value opportunity if fundamentals support a recovery. The 52-week low of $68.07 was tested in May 2026, and the stock has since bounced ~16% from that level, indicating some support. Short-term momentum shows a mixed picture: the 1-month price change is +3.1%, while the 3-month change is -5.4%. This divergence—positive short-term momentum within a longer-term downtrend—could signal a potential trend reversal or a temporary relief rally. The relative strength versus the S&P 500 is negative across all periods, with a 1-month relative strength of +2.5% and a 1-year relative strength of -29.2%, confirming persistent underperformance. The stock's beta of 1.168 indicates slightly higher volatility than the market, amplifying both upside and downside moves. Key support is at the 52-week low of $68.07; a break below would signal further downside. Resistance is at the 52-week high of $100.96; a breakout above would indicate a strong reversal. The current price is 22% below the high, suggesting overhead supply. The short ratio of 3.78 days indicates moderate bearish sentiment but not extreme.
Beta
1.17
1.17x market volatility
Max Drawdown
-30.6%
Largest decline past year
52-Week Range
$68-$101
Price range past year
Annual Return
-1.6%
Cumulative gain past year
| Period | IR Return | S&P 500 |
|---|---|---|
| 1m | +8.0% | +0.1% |
| 3m | -1.2% | +5.7% |
| 6m | -3.8% | +8.5% |
| 1y | -1.6% | +20.3% |
| ytd | +6.3% | +10.1% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
IR Fundamental Analysis
Revenue trajectory shows steady growth: Q1 2026 revenue of $1,847M grew 7.6% YoY, accelerating from Q4 2025's $2,091M (which included a one-time adjustment) and Q1 2025's $1,717M. The Industrial Technologies and Services segment contributed $1,445M (78% of total), while Precision and Science Technologies added $403M (22%), both showing solid demand. The multi-quarter trend indicates consistent mid-single-digit organic growth, supported by aftermarket services and secular trends in automation and energy efficiency. Profitability is robust: Q1 2026 net income was $192M, with a net margin of 10.4%, up from 6.1% in Q2 2025 (which had a loss due to restructuring). Gross margin improved to 42.9% in Q1 2026 from 38.5% trailing twelve months, driven by pricing and cost controls. Operating margin of 15.7% reflects operational leverage, though it remains below the 19.2% in Q3 2025, indicating some near-term pressure. The company is consistently profitable with positive net income over the past four quarters. Balance sheet is healthy: debt-to-equity of 0.48x is moderate, and the current ratio of 2.06x indicates strong liquidity. Free cash flow (TTM) of $1,161M provides ample coverage for capex ($36M in Q1 2026) and dividends ($8M quarterly). ROE of 5.8% is modest but improving, reflecting efficient capital use. The company generates sufficient internal cash to fund growth and share repurchases ($90M in Q1 2026), reducing reliance on external financing.
Quarterly Revenue
$1.8B
2026-03
Revenue YoY Growth
+7.6%
YoY Comparison
Gross Margin
42.9%
Latest Quarter
Free Cash Flow
$1.2B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is IR Overvalued?
Since net income is positive, the primary valuation metric is the P/E ratio. The trailing P/E of 54.3x is elevated due to depressed earnings from prior restructuring, while the forward P/E of 20.5x reflects expected earnings normalization. The gap between trailing and forward P/E implies the market anticipates significant earnings growth, which is supported by analyst estimates of $4.60 EPS for the current fiscal year. Compared to the industrial machinery sector, Ingersoll Rand's forward P/E of 20.5x is at a premium to the industry average of approximately 18x (based on sector data), representing a 14% premium. This premium is partially justified by the company's superior gross margin (38.5% vs. industry ~35%) and consistent free cash flow generation, but the high trailing multiple warrants caution. Historically, the stock's trailing P/E has ranged from 21x (Q4 2021) to 54x (current), placing it near the top of its historical band. This suggests the market is pricing in optimistic future earnings growth, leaving little room for disappointment. The P/S ratio of 4.1x is also above the 5-year average of ~3.5x, indicating elevated revenue multiples.
PE
54.3x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 21x~50x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
22.4x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Ingersoll Rand's trailing P/E of 54.3x is extremely elevated due to depressed earnings from restructuring charges in Q2 2025 (net loss of $115M). While forward P/E of 20.5x appears reasonable, any shortfall in achieving the consensus EPS estimate of $4.60 could lead to multiple compression. The company's ROE of 5.8% is below the industrial sector average of ~15%, indicating lower return on equity. However, the balance sheet is strong with debt-to-equity of 0.48x and current ratio of 2.06x, and free cash flow of $1,161M TTM provides a cushion. Operating margin volatility (ranging from 4.0% to 19.2% over the past four quarters) highlights earnings sensitivity to one-time items and restructuring, though the trend is improving.
Market & Competitive Risks: The stock has underperformed the S&P 500 by 29.2% over the past year, reflecting persistent negative sentiment. With a beta of 1.168, the stock is more sensitive to macroeconomic downturns. A slowdown in industrial production or capital spending could reduce demand for compression and vacuum systems, particularly in the manufacturing and energy end markets. The forward P/E of 20.5x represents a 14% premium to the industry average of ~18x, leaving limited room for multiple expansion and increasing vulnerability to valuation compression if growth disappoints. The wide analyst target spread ($80-$115) indicates high uncertainty about future earnings.
Worst-Case Scenario: A prolonged industrial recession combined with failure to achieve margin targets could cause the stock to retest its 52-week low of $68.07, representing a 14% decline from the current price of $79.14. If earnings fall short of estimates, the trailing P/E could compress from 54x to the historical average of ~30x, implying a price of around $45 (based on TTM EPS of $1.50), a 43% downside. However, given the company's strong free cash flow and moderate debt, a more realistic worst case is a decline to the low analyst target of $80, which is only 1.1% below current levels, suggesting limited downside in the near term.
FAQ
The primary risk is valuation compression: the trailing P/E of 54.3x leaves little room for error, and any earnings miss could trigger a sharp decline. Second, the stock's beta of 1.168 makes it sensitive to macroeconomic downturns, and a slowdown in industrial production could pressure revenue growth. Third, operating margin volatility (ranging from 4.0% to 19.2% over the past four quarters) indicates earnings unpredictability. Fourth, the stock's persistent underperformance (1-year return -8.3% vs S&P 500 +20.9%) suggests negative sentiment that could take time to reverse. The most severe risk is a 43% decline to $45 if trailing P/E compresses to historical average of 30x.
The 12-month forecast is mixed: the base case (50% probability) sees the stock reaching the analyst average target of $93.50, driven by steady revenue growth and margin improvement. The bull case (25% probability) targets $95-$115, assuming strong execution and multiple expansion. The bear case (25% probability) sees the stock falling to $68-$80, if macro headwinds or execution missteps occur. The most likely scenario is the base case, with gradual appreciation as earnings normalize. Key assumptions include achieving consensus EPS of $4.60 and maintaining gross margins above 40%.
On a trailing basis, IR appears overvalued with a P/E of 54.3x, near the top of its historical range of 21x-54x. However, this is distorted by depressed earnings from restructuring charges. On a forward basis, the P/E of 20.5x is more reasonable, representing a 14% premium to the industrial machinery sector average of ~18x. The P/S ratio of 4.1x is above the 5-year average of ~3.5x, suggesting elevated revenue multiples. Overall, the stock is fairly valued relative to forward earnings expectations but overvalued on a trailing basis. The market is pricing in optimistic earnings growth, so any disappointment could lead to multiple compression.
Ingersoll Rand offers a compelling risk/reward at current levels, with an average analyst target of $93.50 implying 18.1% upside. The company has strong fundamentals: accelerating revenue growth of 7.6% YoY, improving gross margins to 42.9%, and robust free cash flow of $1,161M. However, the trailing P/E of 54.3x is elevated due to past restructuring, and the stock has underperformed the market by 29.2% over the past year. For long-term investors with a 3-5 year horizon, the forward P/E of 20.5x is reasonable, but near-term volatility is likely. It is a good buy for those who believe in the IRX margin expansion story and can tolerate short-term price swings, but conservative investors may prefer to wait for a clearer uptrend.
IR is better suited for long-term investment (3-5 years) given its cyclical nature and current technical weakness. The stock's beta of 1.168 and 1-year decline of 8.3% make it risky for short-term trading, though the 1-month gain of 3.1% suggests potential for a bounce. The company's strong free cash flow, moderate debt, and consistent dividend (yield 0.1%) support a long-term hold. Short-term traders may find opportunities around earnings announcements, but the wide analyst target range indicates high uncertainty. A minimum holding period of 12 months is recommended to allow the earnings recovery story to play out.