Ingersoll-Rand Is A Tale Of Two Segments, According To Barclays

Barclays provided its outlook on Ingersoll-Rand PLC IR, describing it as a "tale of two cities."

• Climate (commercial and resi HVAC) continues to be the bright spot, and bookings up 6 percent in the quarter (commercial up high single digits and resi up low-teens) point to continued strength in the back half of the year.
• Industrial continues to struggle on oil & gas and derivative heavy industry weakness (e.g. steel, marine). Margins here were down 350 bps, in part on significant declines in large equipment sales (management noted that 400+ horsepower sales are down in the 50 percent range vs. prior expectations of down nearly 20 percent).

Ingersoll-Rand cut its full year core growth estimate to 2-3 percent from 2-4 percent. Climate core growth was reduced to 4-5 percent from 4-6 percent taking into account modestly lower expectations in Transport and Middle East HVAC. Industrial core growth was cut to down 4-5 percent from down 2-4 percent on the aforementioned declines in large compressors.

Barclays has an Equal-Weight rating and $75 price target on the stock.