Let me read the latest earnings release and gather comparison data and stock price.Let me pull the prior-year Q2 (2025Q2) release for comps and the most recent news.# Ingersoll Rand (IR) — Q2 2026 Earnings Preview
IR heads into Q2 as a "show-me" quarter on two fronts: (1) whether the ITS margin decline — down year-over-year for five straight quarters — finally bottoms and begins the promised second-half inflection, and (2) whether the delayed Middle East long-cycle orders keep flowing back into the funnel. Management reaffirmed (did not raise) full-year guidance at Q1, so watch closely for any change in tone here.
On the Q1 call, CFO Vik Kini gave unusually specific Q2 framing. Backing into the reaffirmed full-year guide (1H = 46% of EBITDA/EPS phasing) implies the following:
| Metric | Q2 2026 Implied | Q2 2025 Actual (comp) | Implied YoY |
|---|---|---|---|
| Adj. EPS | ~$0.82–0.87 (mid ~$0.85) | $0.80 | ~+6% |
| Adj. EBITDA | ~$511–538M (mid ~$525M) | $509.4M | ~+3% |
| Adj. EBITDA margin | slightly down YoY (–50 to –100 bps) | 27.0% | ~26.0–26.5% |
| Organic revenue | "flattish to slightly up" | — | ~flat |
Explicit management guardrails to hold them to: - Organic revenue: Q1 was slightly negative (as planned); Q2 flattish to slightly up; then low-single-digit growth in 2H. - Margins: Sequential improvement Q1→Q2, but still down YoY, "primarily driven by ITS." PST should again show YoY margin expansion. - Full-year targets: Revenue +2.5–4.5% (organic ~1% at midpoint, M&A ~2%, FX ~+0.5%); Adj. EBITDA $2.13–2.19B; Adj. EPS $3.45–3.57 (+5% at midpoint); ~95% FCF conversion; ~23% tax rate; ~394M shares.
1. ITS margin inflection — the crux of the story. ITS Q1 adjusted EBITDA margin was 26.7%, down 210 bps YoY, pressured by decremental volume flow-through, one-for-one tariff-price dilution, and continued commercial investment. Management's thesis is that H2 margins expand back toward long-term targets on: (a) better organic volumes, (b) in-year 2026 pricing actions layering in, (c) restructuring benefits (taken in 2H 2025) landing, and (d) direct-material/procurement savings (direct material = ~70% of COGS). Q2 is still expected down YoY, but investors will scrutinize the sequential build and any change in the "exit-rate margins consistent with long-term targets" language. A soft Q2 that pushes the entire margin recovery into Q4 would be the bear case.
2. Middle East order recovery. Q1 saw ~$40M of long-cycle orders delayed (plant/capacity-expansion projects), which by itself turned ITS organic orders to –3% (roughly flat ex-delay). Management said ~1/3 came back in April and expects the rest through 2026 with no full-year revenue/EBITDA impact and no cancellations. Confirmation that these bookings actually landed — and that the conflict hasn't rippled into Europe — is a key credibility check.
3. Short-cycle vs. long-cycle demand. The encouraging Q1 narrative: U.S. compressor activity stabilizing (ISM back above 50), core tool business growing mid-single digits organically, blower/vacuum up, PST short-cycle book-and-ship growing, and China outperforming its market for a third straight quarter. The pushback (raised by UBS on the Q1 call): this short-cycle momentum isn't yet "piercing through" to reported organic growth. Watch total-company and segment orders and book-to-bill (Q1 was 1.07x total; ITS 1.08x; PST 1.04x) as the leading tell.
PST has been the outperformer: Q1 organic revenue +4%, adjusted EBITDA +15% with margin up 120 bps to 30.3%, and Life Science Technologies orders up double digits on U.S. biopharma/API reshoring. The question is sustainability — management wouldn't extrapolate double-digit LST growth for the full year but sees a mid-single-digit 2-year stack as the right run-rate. Any moderation vs. Q1's strength, or continued acceleration, matters given PST is carrying the margin story while ITS recovers.
IR shares are roughly $84–86, up ~6% YTD but down ~14% from the February high near $99. The stock fell on the Q1 print (from ~$81 to ~$77) and bottomed near $69 in May before recovering. That drawdown reflects the market's skepticism on the ITS margin/organic-growth trajectory — meaning the bar into Q2 is more balanced than demanding. A clean sequential margin improvement, confirmed Middle East order recovery, and any move toward a guidance raise (as happened at Q2 last year) would be the positive catalysts; a purely reaffirmed guide with margin recovery again back-half-weighted risks testing patience.
Note on periods: figures reflect the company's reported fiscal periods; Q2 2026 comps are against Q2 2025 (revenue $1,887.9M, adj. EBITDA $509.4M / 27.0% margin, adj. diluted EPS $0.80, orders $1,939.6M).