Ingersoll Rand Inc. (IR Quick QuoteIR - Free Report) is poised to gain from its exposure to various end markets, including industrial manufacturing, mining & construction, energy, transportation, medical and laboratory sciences, food and beverage packaging. Increasing orders across its product portfolio of industrial vacuums and blowers, and compressors are expected to drive the Industrial Technologies & Services segment. The segment’s order totaled $1.4 billion, up 3.3% year over year in the fourth quarter of 2024. 

Strong momentum in the life sciences business, driven by growth in short-cycle orders and multi-year contract wins for the production of legacy space suits, is likely to be a tailwind for the Precision and Science Technologies segment. The segment reported an order of $378 million in the fourth quarter, up 29% year over year.

Over time, IR has expanded its market share, product offerings and customer base through acquisitions.  In the fourth quarter of 2024, acquisitions contributed 7.8% to total revenues for Ingersoll Rand. The company completed the acquisition of APSCO, Blutek and UT Pumps in October 2024. APSCO will strengthen Ingersoll Rand’s position in the dry and liquid bulk markets and be incorporated into the IT&S segment, while Blutek will enhance its competitiveness in biogas and carbon capture projects. Blutek will be incorporated within the IT&S segment. UT Pumps will be integrated into the Precision and Science Technologies segment, expanding the company’s product portfolio with new pump technology. 

Additionally, Ingersoll Rand acquired ILC Dover, CAPS, Del Pumps, Fruitland and Friulair in 2024. These companies have also been integrated into the Precision & Science Technologies and IT&S segments, enhancing capabilities in biopharma, liquid handling, life sciences, food & beverage, mobile vacuum and air dryer businesses.

Ingersoll Rand’s commitment to rewarding shareholders through dividend payments and share buybacks is encouraging. In 2024, it paid out dividends of $32.3 million and repurchased treasury stocks worth $260.7 million. In April 2024, Ingersoll Rand’s board of directors approved an additional $1 billion increase to the share repurchase authorization. This is incremental to the amount remaining on the company’s existing $750 million authorization. Also, strong free cash flow generation supports the company’s shareholder-friendly activities. In 2024, it reported a free cash flow of $1.25 billion.

Some Negatives

The company has been dealing with the adverse impacts of high costs and expenses. The cost of sales increased 1.8% year over year in 2024 due to the rising cost of raw materials and parts. Ingersoll Rand’s selling and administrative expenses increased 5.6% year over year in 2024. Selling and administrative expenses, as a percentage of revenues, rose 10 basis points to 18.6% in the same period. The company has been witnessing high costs associated with investments to support growth in areas like demand generation, digital and other IT-related investments. It expects to incur corporate costs of $165 million in 2025. Escalating costs are a pressure on the bottom line.

Ingersoll Rand has considerable exposure to regions outside the United States. Its significant international presence exposes it to political and economic disruptions, all of which can directly affect its profits. Also, the company is exposed to headwinds arising from unfavorable movements in foreign currencies. In the fourth quarter of 2024, adverse foreign currency movements hurt sales by 0.8%.

Ingersoll Rand is engaged in providing various mission-critical air, fluid, energy and medical technologies services and solutions globally. The company, which belongs to the Manufacturing - General Industrial industry, faces stiff competition from peers like Graham Corporation (GHM Quick QuoteGHM - Free Report) , Crane Company (CR Quick QuoteCR - Free Report) and Parker-Hannifin Corporation (PH Quick QuotePH - Free Report) .