Balanced Outlook: Allegion’s Strong Performance in Americas Offset by Residential Weakness and Conservative Guidance

In a report released today, Christopher Snyder from Morgan Stanley reiterated a Hold rating on Allegion (ALLE – Research Report), with a price target of $139.00.

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Christopher Snyder has given his Hold rating due to a combination of factors that reflect both positive and cautious elements in Allegion’s recent performance and outlook. The company’s first-quarter earnings per share surpassed expectations, primarily driven by strong performance in the Americas region, which saw notable margin improvements. This margin strength provides a buffer against potential cost increases from tariffs. However, despite these positive results, Allegion maintained its guidance for 2025, indicating a conservative outlook amidst challenging market conditions and potential macroeconomic headwinds.
While there was a strong performance in non-residential sectors, the residential segment showed a decline, raising concerns about future demand dynamics. The market reaction is expected to be subdued, as next twelve months’ consensus forecasts are adjusted downward. Nonetheless, the market may find some encouragement in the potential for market share gains in the Americas, driven by competitive advantages related to tariff changes. Overall, the Hold rating reflects a balanced view of Allegion’s current strengths and the uncertainties it faces moving forward.

In another report released on April 22, Mizuho Securities also maintained a Hold rating on the stock with a $130.00 price target.

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