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Ingersoll (IR) Remains Well Poised for Long-Term Growth


On May 18, we issued an updated research report on Industrial goods manufacturer Ingersoll-Rand Plc IR.

Headquartered in Dublin, Ireland, Ingersoll designs, manufactures, sells and services a diverse portfolio of industrial and commercial products across the globe. From enhancing the quality and comfort of air in homes and buildings to transporting and protecting food and perishables, the product portfolio of the company secures homes and commercial properties, and increases industrial productivity and efficiency.

Ingersoll has a solid foundation of global brands and a leading market share in all major product lines. The geographic and industrial diversity coupled with a large installed product base provides ample growth opportunities within service, spare parts and replacement revenue streams. Additionally, the company’s complementary portfolio of products and services is likely to assist it in strengthening market position and achieving high productivity.

With a diligent execution of operational plans, Ingersoll has outperformed the Zacks categorized Machinery-General Industrial industry in the last three months with an average return of 8.3% compared with a 5.6% gain for the latter. Ingersoll is currently focusing on improving the efficiencies and capabilities of products and services within its core businesses after the divesture of the commercial and residential security businesses. On the other hand, strategic acquisitions served as growth drivers, supplementing the organic growth of the company. Ingersoll is likely to achieve steady improvements in operating profitability with new product developments, investments in IT platform and enhancement of channel services footprint and product management capabilities.

For full-year 2017, management also reaffirmed its earlier bullish guidance. The company anticipates organic revenues to improve 3%, while reported revenues are expected to be up 2% year over year. Ingersoll expects adjusted earnings from continuing operations to be in the range of $4.30 to $4.50 per share. Cash from operating activities is anticipated to be about $1.4 billion, while free cash flow is expected to be within $1.1 billion to $1.2 billion. Such bullish outlook portrays favorable growth dynamics and gives confidence to investors.

We remain impressed with the inherent growth potential of this Zacks Rank #2 (Buy) stock. Other top stocks in the industry include Altra Industrial Motion Corp. AIMC, Applied Industrial Technologies, Inc. AIT and Graco Inc. GGG, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Altra Industrial topped estimates in each of the trailing four quarters with an average positive earnings surprise of 15.9%.

Applied Industrial has a long-term earnings growth expectation of 12%. It surpassed estimates thrice in the trailing four quarters with an average positive earnings surprise of 9.8%.

Graco has a long-term earnings growth expectation of 10.3%. It surpassed estimates thrice in the trailing four quarters with an average positive earnings surprise of 13.9%.

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