IR — Ingersoll Rand Inc.

The market is not excited: shares have slid from $100.96 to the high-$70s and are trading below the 20-, 50-, and 200-day averages, with RSI at 40.1. However, the Q2 beat, 8.5% revenue growth, raised guidance, and consensus Buy/Outperform rating have put a floor under sentiment, leaving the tape in a cautious, wait-and-see mood rather than outright bearish.

Revenue growth has accelerated over the last four reported quarters: YoY came in at +4.6% in Q2'25, +5.1% in Q3'25, +10.1% in Q4'25, +7.6% in Q1'26, and +8.5% in Q2'26 (to $2.05B). The Q2'25 GAAP net loss of -$115.3M was a one-off impairment/charge blip, not a business collapse; excluding it, operating margins have generally held in the high-teens to low-20s, with Q2'26 operating income of $380M (18.6% margin). Trailing-twelve-month free cash flow is about $1.22B, and Q2'26 operating cash flow rose 20% YoY. The clear inflections are aftermarket mix (~36-37% of sales) and order growth of +5% organic, both supporting a durable mid-single-digit growth algorithm rather than a peak-cyclical rollover.

As of 2026-08-27, the trailing P/E is 32.2x on GAAP TTM EPS of $2.45, but that trailing base is depressed by the Q2'25 write-off. On FY2026 adjusted EPS guidance midpoint of $3.545, the stock is about 22.3x forward earnings. That is well below IR's own 5-year average P/E of 43.7x and P/S of 4.46x versus the current 3.89x; PEG of 0.36 also flags that the market is paying much less for the growth rate than it has historically. In absolute terms 22x is not a deep-value multiple, but relative to its own history and the raised guidance, it is more reasonably priced than at any point in the past several years.

At $78.97, the price is already reflecting the risk that the industrial cycle softens and guidance gets walked back. If management simply delivers the raised FY26 range, current 22x forward earnings is not demanding; a reversion to a 24-25x forward multiple would put the stock in the $85-$89 area. If Q3 orders decelerate or margins slip, the multiple could grind down toward 19-20x forward earnings, implying roughly $67-$71. The playbook is therefore: price is offering a reasonable entry for those who believe the aftermarket mix and IRX margin discipline can smooth out the equipment cycle, but the early sellers are not yet capitulating enough to mark a technical bottom.

As of 2026-08-27, RSI(14) is 40.1, which is weak but not oversold. Price is -5.5% below the 20-day SMA, -3.6% below the 50-day SMA, and -3.7% below the 200-day SMA, meaning the trend is down or at best range-bound. There is no clear reversal signal in the data; the chart suggests waiting for a close back above the 50-day or an RSI push above 50 before treating this as a technical entry, even if the fundamental setup is improving.

• Rising Treasury yields and high rates have pressured long-duration industrial multiples, compressing cyclical valuations broadly.
• The broader industrials sector (XLI) has cooled from its highs, dragging IR down with beta of 1.16.
• Secular demand in life sciences, water treatment, clean energy, and automation remains a structural tailwind for IR's shorter-cycle products.
• IR's liquidity position ($3.8B total liquidity, ~1.7x net leverage) insulates it from credit-market stress and supports continued bolt-on M&A.
• Trade policy and supply-chain watchpoints create choppy sentiment across capital goods, though IR's localized footprint reduces direct tariff exposure.

• Q3 2026 earnings in late October/early November: order growth and full-year guidance confirmation will be the next hard checkpoint.
• September investor conferences (Vertical, Jefferies, Morgan Stanley) where management can reinforce the aftermarket and M&A message.
• Continued bolt-on M&A like Lone Star Blower (announced Aug 3, 2026) contributing high-margin recurring/rental revenue.
• Re-rating potential if the 10-year yield stabilizes and the industrial ETF begins to catch a bid.

• A cyclical slowdown in industrial equipment/orders could push the high-margin aftermarket mix down and expose the 16.7x EV/EBITDA multiple.
• Multiple compression risk: at 22x forward earnings and with beta 1.16, a broad industrial derating could take the stock to the low-$70s before fundamentals matter.
• M&A integration/strategy risk—bolt-on deals can dilute discipline if management overpays for growth at stretched valuations.
• The GAAP earnings history is noisy (e.g., Q2'25 net loss, Q4'25 operating income > gross profit), so headline quality metrics can mislead quarter to quarter.

Ingersoll Rand is a higher-quality industrial that has been de-rated from a rich level to a reasonable one. The raised guidance, 8.5% revenue growth, ~$1.2B of TTM FCF, and a fortress balance sheet argue the downside is more limited than in most cyclicals, but the soft technical picture and macro overhang mean there is no urgency to chase. I view the stock as a reasonable long-term investment at $78.97 with a calculated fair value around $88, but a patient investor can likely build a better position if the broader industrial tape pushes it toward the low-$70s.

I calculated $88.0 by applying an 18.5x EV/EBITDA multiple (a modest re-rating from the current ~16.8x, justified by approximately 25% adjusted EBITDA margins and 36-37% recurring aftermarket revenue) to TTM adjusted EBITDA of about $2.0B, subtracting net debt of roughly $2.9B, and dividing by approximately 391M shares.