Ingersoll Rand Earnings: Strong Margin Expansion Continues Despite Softer Organic Growth Outlook

Narrow-moat-rated Ingersoll Rand delivered a 9% year-over-year increase in third-quarter adjusted EPS to $0.84, fueled by continued margin expansion despite a challenging macroeconomic backdrop. Nonetheless, we think that the firm’s strong execution was offset by a lowered organic growth outlook, as management now expects full-year organic revenue to be down 2% to flat, compared with flat to up 2% previously. We’ve made some puts and takes in our model, but our $80 per share fair value estimate remains unchanged, as our reduced near-term revenue growth forecast was offset by slightly more optimistic margin assumptions and time value of money.