Rating Change #3
Ingersoll-Rand PLC (IR) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- INGERSOLL-RAND PLC has improved earnings per share by 27.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, INGERSOLL-RAND PLC reported lower earnings of $1.22 versus $2.24 in the prior year. This year, the market expects an improvement in earnings ($3.14 versus $1.22).
- The revenue fell significantly faster than the industry average of 29.5%. Since the same quarter one year prior, revenues slightly dropped by 5.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Machinery industry average. The net income increased by 14.2% when compared to the same quarter one year prior, going from $212.10 million to $242.30 million.
- The gross profit margin for INGERSOLL-RAND PLC is currently lower than what is desirable, coming in at 28.50%. Regardless of IR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.90% trails the industry average.
- IR has underperformed the S&P 500 Index, declining 22.52% from its price level of one year ago. Despite the stock's decline during the last year, it is still somewhat more expensive (in proportion to its earnings over the last year) than most other stocks in its industry. We feel, however, that other strengths this company displays offset this slight negative.
Ingersoll-Rand Plc engages in the design, manufacture, sale, and service of a portfolio of industrial and commercial products in the United States and internationally. The company has a P/E ratio of 36.1, below the average industrial industry P/E ratio of 38.6 and above the S&P 500 P/E ratio of 17.7. Ingersoll-Rand has a market cap of $10.97 billion and is part of the industrial goods sector and industrial industry. Shares are up 24.7% year to date as of the close of trading on Thursday.You can view the full Ingersoll-Rand Ratings Report or get investment ideas from our investment research center.
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