UPDATE: Sterne Agee Downgrades Ingersoll-Rand on Valuation

Sterne Agee lowers its rating on Ingersoll-Rand Co. Ltd. IR to Neutral from Buy as it updated its valuation base. Sterne Agee says, “Our prior Buy recommendation was based on the stock trading well below its historical forward PE average after operational missteps in adapting to slower end markets, and a regulatory loophole that placed IR at a product disadvantage versus its peers. IR is currently trading at 11.4X Sterne Agee FY2012E EPS of $3.00 and at a 3% discount to the S&P forward multiple of 11.7X. Over the last 2- and 5-year periods, IR has traded at an average forward P/E multiple of 12.4X and 11.6X, respectively, and either in line with the S&P forward multiple or at a slight discount.” IR closed at $34.18 per share on Monday.