As the management of Ingersoll-Rand Co. (NYSE: IR) continues to see a recovery in the US, guided by the light commercial side of the market, analysts at Deutsche Bank reiterated Buy rating on the shares of the former. They set a price target of $58 for the stock.
DB analysts state that IR’s industry growth is coming slower than expected for the full year pointing at mid and high single digit growth. The company’s management noted that AHRI expected 6.5 percent industry growth for FY2011 at the beginning of the year. They state that the industry may struggle to achieve the growth rate. Analysts state that the situation get tougher by two-thirds cut in government tax incentives that has resulted in a mix down to lower efficiency HVAC systems and R22 dry shipments. They state that IR’s management is aiming at reducing DWAC to where it was before the Tranne deal as per the $2 billion repurchase authorization. The company has announced another round of price increases that have been followed by other industry player. The company’s price realization continues to meet expectations and management is confident about guidance for 30 bps price or cost headwind during 2011.
On a year-to-date basis, IR’s share performance is -6.37 percent. As compared to Standard & Poor’s 500, IR’s YTD share performance is -7.35 percent.
Ingersoll-Rand is an international supplier of material handling devices and services to transportation, construction, and agricultural industries. It has a market capitalization of $14.60 billion and P/E ratio of 1.020. It has 331 million outstanding shares.
Shares of IR were down 0.11 percent or 5 cents to trade at $43.58 in the closing session.
