Ingersoll (IR) Surges 5.4%: Is This an Indication of Further Gains?

Ingersoll Rand Inc. IR shares soared 5.4% in the last trading session to close at $93.72. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 8.2% gain over the past four weeks.

Ingersoll Rand’s rally is primarily driven by optimism over strong momentum in the Industrial Technologies & Services segment, driven by higher orders across its product portfolio of industrial vacuums and blowers, power tools and compressors. Strength in the life sciences business, driven by growth in fluid handling product orders within the legacy Gardner Denver Medical platform, is likely to be a tailwind for the Precision and Science Technologies segment.

This maker of flow control and compression equipment is expected to post quarterly earnings of $0.91 per share in its upcoming report, which represents a year-over-year change of +8.3%. Revenues are expected to be $2.05 billion, up 7.8% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Ingersoll, the consensus EPS estimate for the quarter has been revised 1.8% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on IR going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Ingersoll belongs to the Zacks Manufacturing - General Industrial industry. Another stock from the same industry, Generac Holdings (GNRC), closed the last trading session 1.4% higher at $173.28. Over the past month, GNRC has returned 15%.

For Generac Holdings, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.81. This represents a change of -35.4% from what the company reported a year ago. Generac Holdings currently has a Zacks Rank of #4 (Sell).

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This article originally published on Zacks Investment Research (zacks.com).

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