IR - Ingersoll Rand: Improvement In Organic Growth And Continued M&A Momentum Should Drive Stock Higher

2024-06-21 11:12:25 ET

Summary

• Ingersoll Rand Inc. saw a sequential acceleration in orders and marketing qualified leads last quarter which should help improve its organic growth in the coming quarters.
• The company's exposure to megatrends like reshoring and sustainability, and focus on digital initiatives, and increasing recurring aftermarket revenues bodes well for medium to long-term growth.
• Margin growth is expected from operating leverage, price increases, and margin accretive acquisitions, supporting a buy rating on the stock.

Investment Thesis

Ingersoll Rand Inc.'s ( IR ) organic revenue growth should recover in the coming quarters. The company saw a sequential acceleration in organic orders and Marketing Qualified Leads (MQL) in the last quarter, which indicates good demand momentum and bodes well for revenue growth in the coming quarters. Further, megatrends like reshoring and sustainability should drive demand for the company's products, boosting revenue growth. In the medium to long term, the company's focus on digital initiatives and increasing recurring revenues should help it post strong revenue growth. Besides organic growth, the company has a healthy balance sheet which provides it ample financial flexibility to pursue bolt-on M&A....

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