IR — Ingersoll Rand Inc.

The market is de-rating IR despite good numbers. As of 2026-09-13 the stock has lost 13.96% in one month and 11.2% over six months, trading below its 20-day (-6.3%), 50-day (-10.0%) and 200-day (-11.1%) moving averages. The disconnect is macro, not company-specific: elevated rates are squeezing industrial capex expectations, demand in APAC (notably China) is soft on pricing and baseline volumes, and the whole machinery complex is compressing multiples ahead of a slowdown that hasn't appeared in the results yet. Meanwhile the sell side remains constructive — 8 Buy vs. 7 Hold, consensus rating "Buy," average price target $90.60 (recent-update average $85.50, range $84-$103) — and the company just raised guidance on July 30 and announced the Lone Star Blower acquisition on August 3, 2026. Investors are currently voting with the tape, not the earnings.

Revenue is reaccelerating, not decelerating. Year-over-year growth ran 2.8% (Q1 2025), 4.6% (Q2 2025), 5.1% (Q3 2025), 10.1% (Q4 2025), 7.6% (Q1 2026) and 8.5% (Q2 2026, revenue $2.049B vs. $1.888B). That is a genuine inflection from low-single-digit to high-single-digit growth across four consecutive quarters, supported by pricing, aftermarket and bolt-on M&A — not a one-quarter blip. GAAP operating margin (17.6% in Q1 2025, 4.0% in Q2 2025, 19.2% in Q3 2025, 31.7% in Q4 2025, 15.7% in Q1 2026, 18.6% in Q2 2026) is noisy and should not be read literally: Q2 2025 absorbed a one-off charge (net loss of -$115.3M on an 824.9M gross profit), and Q4 2025 shows a physically odd 24.1% gross margin (gross profit $503.2M vs. $855.2M in Q3 2025) against a 31.7% operating margin — both are distortions, not trend. The clean signal is the adjusted figure: Q2 2026 adjusted EBITDA of $520M at a 25.4% margin, with gross margin steady in the 42-44% band (43.7% Q3 2025, 42.9% Q1 2026, 42.1% Q2 2026) and GAAP EPS compounding ($0.61, $0.67, $0.49, $0.66 in the last four quarters). Free cash flow is the quiet strength: TTM FCF through 2026-06-30 is $1,219.3M vs. $1,160.8M for the TTM through 2026-03-31, and Q2 2026 FCF of $268.9M was up 27.8% from $210.4M a year earlier. With the deterministic accruals ratio at -0.21%, cash earnings exceed reported net income — high earnings quality, no receivables/inventory games.

As of 2026-09-13 the stock trades at 29.8x trailing EPS ($2.446) but only 20.6x next-FY consensus EPS of $3.544, with a 16.36x EV/EBITDA and a 4.3% TTM free-cash-flow yield ($1,219.3M FCF on a $28.54B market cap). Versus its own history that is cheap: the 5-year average P/E is 43.67 and the 5-year average P/S is 4.46 against 3.59 today; the deterministic overlay scores the valuation context 82/100, "Cheap vs. its own history." Two caveats. First, that 5-year P/E average is inflated by 2020-21 GAAP distortions and by the depressed 2025 base, so the discount is smaller than it looks. Second, 20.6x forward earnings for a company guiding 4.5-6.5% organic growth is not a deep-value multiple — it is a fair-to-attractive one that assumes continued margin expansion and bolt-on M&A. Verdict: modestly cheap relative to its own history and to the $85.50-$90.60 sell-side targets, but not statistically cheap versus the broader market.

The market is not pricing in an earnings miss — it is pricing in a multiple de-rating before the miss arrives. Consensus next-FY EPS of $3.544 implies roughly 5-7% growth; if IR delivers the high end of its 4.5-6.5% organic guidance plus acquired revenue and continued margin expansion, low-double-digit adjusted EPS growth is a live possibility, and 20.6x forward is below what that growth deserves. So the setup is asymmetric only if estimate revisions hold. Practically: watch the Q3 2026 report on October 29, 2026 as the swing factor. If organic growth prints at or above 5% and adjusted EBITDA margin expands again, the multiple should mean-revert toward 23-25x forward, which is the bridge from $72.93 to my ~$81 fair value and onward toward the $85-$90 analyst zone. If orders decelerate or APAC weakness spreads into the Americas, estimates come down and the "cheap versus its own history" argument collapses — cheap gets cheaper.

As of 2026-09-13, RSI(14) stood at 30.2 — right on the oversold boundary but not a washout, with no confirmed bullish divergence — and price was 6.3%, 10.0% and 11.1% below its 20-, 50- and 200-day SMAs respectively. That is a confirmed downtrend, not a range. The stock is 7% off its 52-week low of $68.07, and note the shape of the decline: -1.45% over three months but -13.96% over one month, meaning the damage is recent and sentiment-driven rather than a slow structural bleed. Oversold conditions in a falling-trend stock usually resolve one of two ways — a capitulation flush toward $68 that holds, or a multi-week base. Entry implication: don't buy the first green candle. Wait for either a decisive reclaim of the 20-day SMA or a flush into the $68-69 zone that stops making new lows, and treat either as a signal to scale in rather than a reason to back the truck up.

• Higher-for-longer interest rates are curbing capital-intensive industrial spending and compressing cyclical multiples across machinery; IR's beta of 1.147 amplifies the sector move on the way down.
• Bifurcated regional demand: high-teens order momentum in the Americas is being partly offset by slower baseline growth and pricing headwinds in APAC, particularly China.
• Secular tailwinds in clean energy, semiconductor fab construction, automation and life sciences provide a demand floor for mission-critical flow and compression equipment.
• A large aftermarket and service revenue base (parts, service, rentals) insulates revenue and supports 25%+ adjusted EBITDA margins even when equipment orders soften.
• A funded M&A flywheel — net debt of roughly $2.9-3.7B, about 1.8x TTM adjusted EBITDA, against ~$1.2B of annual FCF — lets IR keep bolting on capacity (Lone Star Blower, Fox s.r.l.) without straining the balance sheet.

• Q3 2026 earnings on October 29, 2026: the key test of the raised 4.5-6.5% organic growth guide and the first hard data on Lone Star Blower integration (announced August 3, 2026).
• Continued bolt-on M&A and the Garrett Motion oil-free industrial partnership announced in May 2026 — incremental revenue and cross-sell the deterministic score cannot capture.
• Fall investor conference circuit, where management will pitch capital allocation and the IRX execution framework; a re-rating often starts with sell-side estimate revisions after these meetings.
• Multiple mean-reversion if rate expectations ease or industrial capex sentiment stabilizes — at 16.4x EV/EBITDA, modest multiple expansion moves the stock a long way.
• Potential downside catalyst: an Americas order book rollover or a fresh China pricing headwind in the Q3 print, which would validate the de-rating.

• Industrial capex cyclicality: high-teens Americas order momentum is the linchpin of the growth story; if it decelerates, the mid-single-digit organic growth thesis breaks and estimates come down.
• Persistent multiple compression — at 16.4x EV/EBITDA and 20.6x forward EPS there is still room to de-rate if machinery peers keep falling, regardless of how good IR's earnings are.
• GAAP-versus-adjusted gap: TTM net margin is 12.1%, GAAP ROE 5.8% and ROIC 6.3%, depressed by heavy intangible amortization and purchase accounting from years of acquisitions; if investors begin to question the add-backs, the quality premium shrinks.
• M&A integration and balance-sheet risk from an active deal program (Lone Star Blower, Fox s.r.l., Garrett partnership) — a goodwill-heavy asset base ($18.19B total assets against $10.18B of equity) leaves limited room for a bad deal.
• Tariff, input-cost and FX exposure for a globally manufactured equipment portfolio, plus APAC/China demand softness that is already visible in localized pricing.

Ingersoll Rand is a genuinely good industrial franchise — 25.4% adjusted EBITDA margins, $1.22B of TTM free cash flow, net leverage around 1.8x and organic growth that has accelerated from 2.8% to 8.5% over six quarters — sitting at a tactically poor moment in the tape: RSI 30.2, price below every major moving average, down 14% in a month, near a 52-week low. My independent fair value of about $81 implies roughly 11% upside from the 2026-09-13 price of $72.93, and the sell side is higher still (~$85-$90), but the market is de-rating cyclicals ahead of a capex slowdown that has not yet shown up in the numbers. The honest read is that this is a quality name you want to own at the right price and at the right point in the cycle — and right now you have neither the valuation cushion nor the technical confirmation to be aggressive. Neutral, with a bias to accumulate on evidence.

I blended three approaches as of 2026-09-13: (1) 23.0x forward consensus EPS of $3.544 = $81.5 — below IR's own recent forward multiple range (~24-30x) to reflect slower organic growth and higher-for-longer rates; (2) 17.0x EV/estimated TTM adjusted EBITDA of ~$2.05B = ~$34.9B EV, less ~$3.66B of net debt (total debt implied by the 0.475 D/E ratio against $10.18B equity, less $1.17B cash) = ~$31.2B equity / ~391M shares = $79.8; and (3) a 3.8% required FCF yield on $1,219.3M of TTM free cash flow = ~$32.1B / 391M shares = $82.0. The average is ~$81, which implies ~11% upside from the $72.93 price and sits deliberately below the $85.50-$90.60 sell-side consensus because I am not willing to underwrite the multiple expansion those targets assume in a de-rating industrial tape.