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Ingersoll Rand (NYSE:IR) on Tuesday was upgraded to Buy from an investment rating of In Line by analysts at Evercore ISI. They said the maker of power tools and industrial products is poised for greater profitability in the next few years as more manufacturers shift operations back to the United States.
“Ingersoll Rand’s (IR) strong global industrial compressor business, No. 1 in North America, is well positioned for re-shoring trends [and] overall energy-efficiency trends,” David Raso, analyst at Evercore ISI, said in a May 9 report. “We ‘stop being cheap’ and buy up for quality in absolute terms.”
Manufacturers that seek to cut energy costs are willing to upgrade their compressors, which typically are responsible for 30% to 40% of energy usage at the average factory, according to Evercore ISI.
Evercore ISI recommends a pair trade of buying stock in Ingersoll Rand (IR) while selling short Illinois Tool Works (NYSE:ITW), whose valuation is more expensive relative to the Standard & Poor’s 500 stock index (SP500).
“In this ‘high-rent district’ of our coverage area (high valuation multiple), these are two fine companies,” according to Evercore ISI. “However, we can get faster, maybe even more reliable, sales and earnings growth at Ingersoll Rand (IR) less expensively than Illinois Tool Works (ITW).”
Seeking Alpha contributor GS Analytics has a Strong Buy rating on Ingersoll Rand (IR) on its valuation and outlook. Columnist Individual Trader rates Ingersoll Rand (IR) as a Hold based on the status of the company’s balance sheet.

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