UPDATE: Deutsche Bank Downgrades Ingersoll-Rand (IR) to Hold

(Updated - August 5, 2022 7:25 AM EDT)

Deutsche Bank analyst Nicole DeBlase downgraded Ingersoll-Rand (NYSE: IR) from Buy to Hold with a price target of $52.00 (from $50.00).

The analyst comments "We still think IR is a high quality company...but very hard to identify drivers of further upside to the stock. Our decision to downgrade IR to Hold is in no way indicative of a change in our view about the high quality nature of the company or the strength of its medium- to long-term strategy. It also is not indicative of a major negative surprise in today's earnings release that changed the trajectory of our forecasts. Rather, it is entirely a call on relative valuation and the near-term catalyst path. Elaborating on this, IR currently trades at nearly 21x NTM P/E, representing a 21% premium to the MI/EE peer group, well above its 9% 1Y average premium. And while we do believe a premium is justified by the company's track record and improving ROIC path, we certainly cannot argue for further multiple expansion from current levels. We also see limited potential for upside to FY23 forecasts; we already model adj. EBITDA up 8% Y/Y, and this relies upon high-30s incremental margins and 7% organic growth - which certainly feels generous given the macro construct. So, we have essentially run of out of upside 'ammo'."

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 $49.78 yesterday.

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