Allegion plc: A Closer Look at Recent Performance and Market Position
Allegion plc (ALLE), based in Dublin, Ireland, stands out as a prominent global provider of security products. With a market cap of $11.5 billion, Allegion specializes in creating a variety of access control systems, locks, and various security innovations.
Classified as a “large-cap stock,” Allegion not only meets the criteria of having a market value of $10 billion or more, but it also emphasizes innovation and operational excellence. The company remains committed to sustainability, underscoring its goal of delivering exceptional value to shareholders while addressing the rising expectations of customers and stakeholders globally.
Current Stock Performance
Currently, shares of Allegion are trading 15.5% below their 52-week high of $156.10, which was achieved on October 18. In the past three months, the stock has gained 8.4%; however, this performance is below that of the Industrial Select Sector SPDR Fund (XLI), which has increased by 16.8% during the same period.
Looking back over the last six months, ALLE has shown a 13.5% increase, outperforming XLI’s 9.4% rise. Nevertheless, when considering the past 52 weeks, ALLE’s growth of 3.4% falls behind XLI’s impressive 16.8% increase.
Since October, Allegion’s stock has dipped below its 50-day moving average, indicating a break from its previous upward trend. After sustaining above its 200-day average since July, it has recently fallen below this benchmark as well, which might suggest a change in market conditions.
Q3 Earnings Report Overview
Following a mixed Q3 earnings report released on October 24, Allegion’s shares dropped 3.7%. The report highlighted a 5.4% year-over-year increase in sales, totaling $967.1 million, though this figure fell slightly short of the $970 million forecast. While earnings per share (EPS) exceeded expectations with a GAAP EPS of $1.99— surpassing estimates by 10.2%—the EBITDA of $248.3 million missed projections by 1.3%.
Resilience was evident in the company’s margins: the operating margin increased to 22.2% from 21% in the previous year, while the free cash flow margin improved significantly from 14.2% to 21.9%. Moreover, both gross and EBITDA margins remained steady year-over-year at 44.7% and 25.7%, respectively, showcasing consistent operational performance.
Industry Comparison and Analyst Outlook
In comparison, Allegion’s competitor, A. O. Smith Corporation (AOS), has struggled more significantly, experiencing a decline of 16.7% over the past year.
Despite this, analysts remain cautious regarding ALLE. Of the eight analysts monitoring the stock, the consensus rating is “Hold,” with the average price target set at $147. This suggests a potential upside of 11.4% from current levels.
On the date of publication,
Rashmi Kumari
did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information please view the Barchart Disclosure Policy
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
