Ingersoll Rand Earnings: Shares Down on Decline in Orders

Narrow-moat-rated Ingersoll Rand’s first-quarter adjusted earnings per share of $0.78 beat the FactSet consensus estimate by 13.3%, but sales fell 1.8% short of expectations. The sales shortfall, coupled with a slowdown in organic orders, sent the shares down roughly 7% in intraday trading May 3. We are maintaining our $78 fair value estimate, as our more muted near-term revenue growth projections were offset by our more optimistic profitability assumptions and the time value of money. We see the market reaction as a function of elevated expectations, as the stock closed roughly 13% above our fair value estimate before the earnings release.