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Allegion (ALLE)
NYSE:ALLE
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Allegion
(NYSE:ALLE)
Rating:78Outperform
Price Target:―
Positive Factors
Earnings
The stronger margins and a lower tax rate contributed to an adjusted EPS of $1.86, surpassing both Morgan Stanley estimates and consensus.
Market Performance
The market should be encouraged to see Americas volume +4.2% in Q4 as the company has a strong track record.
Organic Growth
Organic sales grew by 3.5%, led by strong performance in the Americas.
Negative Factors
End-Market Environment
The expected muted reaction for ALLE shares is due to negative revisions in next twelve-month consensus forecasts.
International Operations
International operations experienced a decline in margins by 100bps.
Macroeconomic Concerns
Despite the positive results, the company reiterated its unchanged guidance for 2025, indicating possible lower volume expectations due to macroeconomic concerns.
Allegion (ALLE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.02B
Dividend Yield1.46%
Average Volume (3M)842.04K
Price to Earnings (P/E)19.6
Beta (1Y)0.80
Revenue Growth5.48%
EPS Growth16.27%
CountryUS
Employees14,400
SectorIndustrials
Sector Strength88
IndustrySecurity & Protection Services
Share Statistics
EPS (TTM)1.86
Shares Outstanding86,049,290
10 Day Avg. Volume951,245
30 Day Avg. Volume842,040
Financial Highlights & Ratios
PEG Ratio-6.39
Price to Book (P/B)9.81
Price to Sales (P/S)0.00
P/FCF Ratio23.42
Enterprise Value/Market Cap0.92
Enterprise Value/Revenue0.74
Enterprise Value/Gross Profit6.51
Enterprise Value/Ebitda3.06
Forecast
1Y Price Target
$137.00Price Target Upside-0.68% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering6
Allegion Business Overview & Revenue Model
Company DescriptionAllegion plc is a global provider of security products and solutions, headquartered in Dublin, Ireland. The company specializes in designing and manufacturing a wide range of mechanical and electronic security products for both residential and commercial markets. Allegion's core offerings include locks, locksets, door closers, exit devices, steel doors, and frames, as well as electronic and biometric access control systems. With a strong presence in over 130 countries, Allegion serves various sectors including education, healthcare, hospitality, and government.
How the Company Makes MoneyAllegion makes money through the sale of its security products and solutions across various sectors. Its revenue model is primarily product-based, with significant earnings from mechanical security products like locks and door hardware, as well as electronic security solutions including access control and biometric systems. The company also benefits from service contracts, which provide ongoing support and maintenance for their products. Strategic partnerships and acquisitions further enhance Allegion's market reach and technological capabilities, enabling it to maintain a competitive edge in the security industry.
Allegion Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q1-2025)
| % Change Since: 9.08%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong start to 2025 for Allegion, with significant revenue growth and margin expansion driven by the nonresidential business in The Americas and strategic product innovations. However, challenges remain in the residential market and international segment, alongside ongoing tariff-related uncertainties. The overall outlook remains positive, supported by resilient nonresidential markets and strategic acquisitions.Q1-2025 Updates
Positive Updates
Strong Start to 2025 with Revenue Growth
Allegion reported Q1 2025 revenue of $941.9 million, an increase of 5.4% compared to 2024, with organic revenue growth of 4% driven by favorable price and volume, particularly in the nonresidential business in The Americas.
Margin Expansion and Increased Earnings Per Share
The adjusted operating margin increased by 150 basis points, and adjusted earnings per share rose by 20% to $1.86, indicating strong operational performance.
Cash Flow and Capital Allocation
Available cash flow for the quarter was $83.4 million, up nearly 250% versus last year. The company returned capital to shareholders, with $40 million in share repurchases and $44 million in dividends.
Product Innovation and Market Expansion
Launch of Schlage Sense Pro and Arrive Smart WiFi Deadbolt, enhancing Allegion's smart lock offerings. Three strategic acquisitions were closed, expanding Allegion's market reach in The Americas and Australia.
Positive Outlook for Nonresidential Market
Nonresidential markets, particularly institutional verticals, remain resilient. The company reiterated its 2025 outlook for adjusted earnings per share of $7.65 to $7.85.
Negative Updates
Residential Market Softness
The residential business declined mid-single digits in Q1, attributed to high mortgage rates and persistent market softness.
International Revenue Challenges
International revenues were down 0.3% on a reported basis, with a 3% currency headwind impacting the quarter. Adjusted operating margins for the International segment decreased by 20 basis points.
Tariff and Pricing Uncertainty
Ongoing tariff changes create uncertainty in pricing strategy, with a potential lag in price-cost alignment impacting Q2 margins.
Company Guidance
In the first quarter of 2025, Allegion reported strong financial performance, achieving a revenue of $941.9 million, reflecting a 5.4% increase compared to the previous year, with organic revenue growth of 4%. The company experienced a 150 basis point increase in adjusted operating margin and a 20% rise in adjusted earnings per share, reaching $1.86. Allegion maintained a robust balance sheet, with available cash flow rising to $83.4 million, up nearly 250% from the prior year. The Americas segment was a key driver, with a 6.8% increase in reported revenue and 4.9% organic growth. The company reaffirmed its full-year 2025 outlook, projecting an adjusted earnings per share between $7.65 and $7.85, despite tariff challenges anticipated to cost approximately $80 million. Allegion's strategic focus included investing in new product innovations, such as the Schlage Sense Pro and Arrive Smart WiFi Deadbolt, and completing three bolt-on acquisitions to bolster its portfolio. The company emphasized its commitment to returning capital to shareholders through dividends and share repurchases, with a dividend payout of $44 million and $40 million in share repurchases during the quarter.Allegion Financial Statement Overview
Summary
Allegion’s financials reflect strong performance with consistent revenue growth, high profitability, and efficient cash flow management. The company's leverage is moderate, but it effectively uses its equity to generate returns. The financial health is robust, with potential for continued growth in the industry.Income Statement
Allegion demonstrates strong revenue growth with a steady increase over the years, culminating in a healthy revenue growth rate of 3.73% in TTM. The company maintains robust profitability, evidenced by high gross and net profit margins of 58.07% and 16.28% respectively in TTM. EBITDA and EBIT margins are also strong, reflecting operational efficiency and effective cost management.85
Very Positive
Balance Sheet
The balance sheet showcases a solid equity base with an improving equity ratio of 35.21% in TTM. Debt-to-equity ratio is moderately high at 1.24, suggesting a balanced use of debt and equity. Return on Equity stands impressively at 38.70% in TTM, indicating efficient use of shareholder funds to generate profits.78
Positive
Cash Flow
Allegion's cash flow is robust, with a steady increase in free cash flow, marked by a 10.08% growth in TTM. The company has a strong operating cash flow to net income ratio of 1.17, indicating solid cash generation capabilities. The free cash flow to net income ratio of 1.03 further underscores the company's ability to convert profits into cash effectively.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.82B | 3.77B | 3.65B | 3.27B | 2.87B | 2.72B | Gross Profit |
| 1.70B | 1.67B | 1.58B | 1.32B | 1.20B | 1.18B | EBIT |
| 805.00M | 780.70M | 708.40M | 586.40M | 530.20M | 403.50M | EBITDA |
| 945.10M | 916.90M | 821.90M | 688.30M | 657.30M | 497.50M | Net Income Common Stockholders |
| 621.90M | 597.50M | 540.40M | 458.00M | 483.00M | 314.30M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 494.50M | 503.80M | 468.10M | 288.00M | 397.90M | 480.40M | Total Assets |
| 4.56B | 4.49B | 4.31B | 3.99B | 3.05B | 3.07B | Total Debt |
| 2.00B | 2.00B | 2.02B | 2.09B | 1.44B | 1.43B | Net Debt |
| 1.50B | 1.50B | 1.55B | 1.81B | 1.04B | 949.20M | Total Liabilities |
| 2.96B | 2.99B | 2.99B | 3.05B | 2.29B | 2.24B | Stockholders Equity |
| 1.61B | 1.50B | 1.32B | 944.50M | 762.40M | 829.40M |
| Cash Flow | Free Cash Flow | ||||
| 641.70M | 582.90M | 516.40M | 395.50M | 443.20M | 443.20M | Operating Cash Flow |
| 727.50M | 675.00M | 600.60M | 459.50M | 488.60M | 490.30M | Investing Cash Flow |
| -213.00M | -228.40M | -129.10M | -994.10M | -31.60M | -56.70M | Financing Cash Flow |
| -406.71M | -394.50M | -298.70M | 437.00M | -529.30M | -321.90M |
Allegion Technical Analysis
Neutral
137.94
Price Trends
135.89
Positive
132.48
Positive
135.61
Positive
Market Momentum
0.29
Positive
45.22
Neutral
24.99
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALLE, the sentiment is Neutral. The current price of 137.94 is below the 20-day moving average (MA) of 141.38, above the 50-day MA of 135.89, and above the 200-day MA of 135.61, indicating a neutral trend. The MACD of 0.29 indicates Positive momentum. The RSI at 45.22 is Neutral, neither overbought nor oversold. The STOCH value of 24.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ALLE.
Allegion Risk Analysis
Allegion disclosed 35 risk factors in its most recent earnings report. Allegion reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Allegion Peers Comparison
Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $6.54B | 22.97 | 26.22% | 1.27% | 0.75% | 7.20% | |
78 Outperform | $1.03B | 23.41 | 27.48% | 1.74% | -1.05% | -2.78% | |
78 Outperform | $12.02B | 19.61 | 42.05% | 1.46% | 5.48% | 16.27% | |
76 Outperform | $3.22B | 53.55 | 2.58% | ― | 14.02% | -69.91% | |
72 Outperform | $6.98B | 14.27 | 16.26% | 2.64% | -5.44% | -16.05% | |
68 Neutral | $3.59B | 22.91 | 54.50% | 1.19% | 1.97% | 41.88% | |
66 Neutral | $4.51B | 12.29 | 5.40% | 3.67% | 4.15% | -12.21% |
* Industrials Sector Average
Performance Comparison
ALLE
Allegion
137.94
20.55
17.51%
BCO
Brink's Company
84.61
-14.66
-14.77%
MSA
MSA Safety
165.06
-11.09
-6.30%
NSSC
Napco Security Technologies
28.72
-23.65
-45.16%
ADT
Adt
8.22
1.03
14.33%
REZI
Resideo Technologies
21.17
1.10
5.48%
Allegion Corporate Events
Shareholder MeetingsBusiness Operations and Strategy
Allegion Holds Annual General Meeting in Dublin
Neutral
Jun 9, 2025
On June 5, 2025, Allegion plc held its Annual General Meeting in Dublin, Ireland, where shareholders elected eight directors, approved executive compensation, ratified PricewaterhouseCoopers as the accounting firm, and renewed the Board’s authority to issue shares under Irish law. These decisions reflect the company’s ongoing governance and strategic initiatives, potentially impacting its operational and financial strategies moving forward.
The most recent analyst rating on (ALLE) stock is a Sell with a $95.00 price target. To see the full list of analyst forecasts on Allegion stock, see the ALLE Stock Forecast page.
Executive/Board Changes
Allegion Announces Leadership Transition with New Appointment
Neutral
May 27, 2025
Allegion plc announced that Jeffrey Braun, the Senior Vice President and General Counsel, will transition to the role of Senior Vice President and Advisory Counsel effective June 16, 2025. This change follows the appointment of his successor by the Board of Directors on May 20, 2025, and Braun is expected to remain in this role until his retirement on June 30, 2025.
The most recent analyst rating on (ALLE) stock is a Sell with a $95.00 price target. To see the full list of analyst forecasts on Allegion stock, see the ALLE Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.