Jefferies Remains Bullish Following Ingersoll-Rand (IR) Analyst Day

Jefferies reiterated a Buy rating and price target of $78.00 on Ingersoll-Rand (NYSE: IR) following analyst day. Analyst Stephen Volkmann believes that IR is gaining credibility as a continuous improvement company.

Volkmann commented on the key takeaways of the event, saying, "Management reiterated the near-term (2016) outlook and provided commentary regarding current trends across Climate and Industrial end markets. Trends in Climate remain favorable, while Industrial end markets are selectively sluggish. There is no change to our model."

Volkmann also added, "IR last provided a 2016 outlook in late 2013. The overall
outlook is unchanged and continues to call for a 4-5% revenue CAGR, EBIT margin expansion of 85-100bps annually and a 15-20% annual EPS CAGR. The change is within the segments where Climate is now expected to realize 13-14% EBIT margin (prior: 12-13%) and Industrial margins are expected to be 15-16% (prior: 17-19%). The reduced outlook in Industrial is driven by weakness in China, Lat Am and fx headwinds. Of note, IR still believes 17-19% EBIT margins are achievable in Industrial, but pushed out that target by ~18 mo. Based on our unchanged forecast for 2016 revenues of $14.4bln and $4.50 in EPS we anticipate IR to be at the upper end of the targeted range."

For an analyst ratings summary and ratings history on Ingersoll-Rand click here. For more ratings news on Ingersoll-Rand click here.

Shares of Ingersoll-Rand closed at $68.12 yesterday.

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