Share price of Ingersoll Rand Inc. (NYSE:IR) on the NYSE has risen more than 20% over the past couple of months. Since many analysts focus on large-cap stocks, we can expect any price-sensitive announcements to be priced into the stock already. However, can the stock still trade at a relatively low price? Let’s take a closer look at Ingersoll Rand’s valuation and outlook to determine if there’s still room for a deal.
Check opportunities and risks in the US engineering industry.
Is Ingersoll Rand Still Cheap?
Great news for investors – Ingersoll Rand shares are still trading at a fairly low price. My estimate is that the intrinsic value of the shares is $67.32, but it’s currently trading on the stock market at $53.64, which means there’s still room to buy now. Even more interesting is that the price of Ingersoll Rand shares is quite volatile, which gives us more chances to buy, as the share price may fall lower (or rise higher) in the future. This is based on a high beta, which is a good indicator of how much a stock is moving relative to the rest of the market.
What does the future of Ingersoll Rand look like?
Investors looking to grow their portfolio may want to consider a company’s prospects before buying its shares. Buying a great company with good prospects at a low price is always a good investment, so let’s also take a look at the company’s future expectations. Ingersoll Rand’s earnings are expected to grow by 68% over the next few years, indicating a very optimistic outlook for the future. This should lead to more sustainable cash flows, resulting in a higher share price.
What does this mean to you
Are you a shareholder? Since IR is currently undervalued, now is the time to increase your holdings. Given the positive outlook on the horizon, it appears that this rise has not yet been fully priced into the share price. However, there are other factors to consider, such as capital structure, which may explain the current undervaluation.
Are you a potential investor? If you’ve been following IR for a while now might be a good time to get into stocks. Its prosperous future is not yet fully reflected in the current share price, which means it’s not too late to buy IR. But before making any investment decisions, consider other factors, such as balance sheet reliability, to make a well-informed purchase.
With that in mind, we wouldn’t consider investing in stocks if we didn’t have a full understanding of the risks. For example, we found 1 warning sign what you should review to get a better idea of Ingersoll Rand.
If you are no longer interested in Ingersoll Rand stocks, you can use our free platform to browse our list of over 50 other stocks with high upside potential.
Estimating is hard, but we help make it easy.
Find out Ingersoll Rand potentially overvalued or undervalued by reviewing our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial condition.
View free analysis
Any feedback on this article? Worried about content? Contact with us directly. Alternatively, send an email to the editorial team at (at) Simplywallst.com.
This article on Simply Wall St is general. We provide commentary based on historical data and analyst forecasts using an unbiased methodology only, and our articles are not intended to provide financial advice. It is not a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. We aim to provide you with long-term focused analysis based on fundamental data. Please note that our analysis may not take into account the latest announcements of price-sensitive companies or quality materials. Simply Wall St has no positions in any of the promotions mentioned.