What Happened?
Shares of industrial manufacturing company Ingersoll Rand (NYSE:IR) fell 3% in the morning session after the company's stock was downgraded by a Wall Street firm earlier in the week, and investors showed caution ahead of its upcoming quarterly earnings report.
The industrial products company saw its shares downgraded to 'Hold' from 'Buy' by Melius Research on Monday. The firm, which set a $93 price target, pointed to narrowing growth opportunities and greater uncertainty in the company's earnings outlook. Melius also noted potential headwinds for the company in its healthcare and clean technology end markets. Adding to the cautious sentiment, investors looked ahead to the company's second-quarter financial results, scheduled for release at the end of July., Analysts' forecasts for the quarter indicated a potential contraction in adjusted earnings per share, which created further uncertainty for the stock.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Ingersoll Rand? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Ingersoll Rand’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock dropped 5.8% on the news that the company reported weak fourth-quarter results. Its organic revenue slightly missed and its revenue was in line with Wall Street's estimates. Looking ahead, guidance largely came in below expectations. Overall, this was a softer quarter.
Ingersoll Rand is down 5.3% since the beginning of the year, and at $85.72 per share, it is trading 18.6% below its 52-week high of $105.35 from November 2024. Investors who bought $1,000 worth of Ingersoll Rand’s shares 5 years ago would now be looking at an investment worth $2,739.
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