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Valued at a market cap of $11.2 billion, Allegion plc (ALLE) is a leading global provider of security products and solutions for business and domestic purposes. The Dublin, Ireland-based company offers an extensive portfolio of mechanical and electronic security products, including doors and door systems, biometric and mobile access control systems, locks, locksets, workforce productivity systems, and other accessories.
Shares of this security products provider have significantly underperformed the broader market over the past 52 weeks. Allegion has marginally increased over this time frame, while the broader S&P 500 Index ($SPX) has gained 17.5%. Moreover, on a YTD basis, the stock is down 1%, compared to SPX’s 1.3% rise.
Narrowing the focus, ALLE’s underperformance becomes more evident when compared to the Industrial Select Sector SPDR Fund’s (XLI) 12.5% return over the past 52 weeks and 2.5% gain on a YTD basis.
On Feb. 18, shares of ALLE plunged 5.6% after its Q4 earnings release, despite delivering better-than-expected Q4 adjusted earnings of $1.86 per share and revenues of $945.6 million, which advanced 10.7% and 5.4%, respectively, from the year-ago quarter. Moreover, organic revenues increased 3.5%, driven by price realization and volume growth in the Americas region.
For 2025, ALLE anticipates modest revenue growth of 1% to 3% and projects EPS in the range of $7.65 to $7.85. However, investor sentiment was likely weighed down by a slight decline in organic revenues from the international segment due to lower volumes and concerns over the company’s expectation of flat international revenue growth in fiscal 2025.
For the current fiscal year, ending in December, analysts expect Allegion’s EPS to grow 3.2% year over year to $7.7. The company’s earnings surprise history is promising. It exceeded the Wall Street estimates in each of the last four quarters.
Among the nine analysts covering the stock, the consensus rating is a “Hold,” which is based on two “Strong Buy,” five “Hold,” one “Moderate Sell,” and one “Strong Sell” rating.
On Feb. 19, Barclays analyst Julian Mitchell maintained an “Underweight” rating on ALLE and lowered its price target to $130, which indicates a marginal potential upside from the current levels.
The mean price target of $138.25 represents a 6.8% upside from Allegion’s current price levels, while the Street-high price target of $165 suggests an upside potential of 27.5%.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
