Allegion (ALLE, Financial) has reported a robust start to 2025, exceeding first-quarter revenue predictions. The company announced a revenue of $941.9 million, surpassing the market consensus of $920.82 million. This achievement reflects the company's agility in a rapidly changing business landscape, particularly highlighting the impressive results of its Americas non-residential sector.
The company's CEO, John Stone, attributed this success to effective execution and strong customer relationships. Furthermore, Allegion received the Gallup Exceptional Workplace Award for the second consecutive year, underscoring a commitment to excellence in workplace culture.
In addition to financial growth, Allegion also expanded its business operations by acquiring Next Door Company and Lemaar during the first quarter. These acquisitions are expected to bolster the company's core operations and leverage existing channel strengths. Strong cash generation positions Allegion for strategic capital deployment, with the aim of creating long-term shareholder value throughout 2025.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 10 analysts, the average target price for Allegion PLC (ALLE, Financial) is $136.83 with a high estimate of $161.34 and a low estimate of $110.00. The average target implies an upside of 8.20% from the current price of $126.46. More detailed estimate data can be found on the Allegion PLC (ALLE) Forecast page.
Based on the consensus recommendation from 12 brokerage firms, Allegion PLC's (ALLE, Financial) average brokerage recommendation is currently 2.8, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Allegion PLC (ALLE, Financial) in one year is $138.66, suggesting a upside of 9.65% from the current price of $126.46. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Allegion PLC (ALLE) Summary page.
ALLE Key Business Developments
Release Date: February 18, 2025
- Revenue: $945.6 million for Q4, a 5.4% increase compared to 2023.
- Organic Revenue Growth: 3.5% in Q4, driven by favorable price and volume.
- Adjusted Operating Margin: Increased by 10 basis points in Q4.
- Adjusted Earnings Per Share (EPS): $1.86, a 10.7% increase versus the prior year.
- Available Cash Flow: $582.9 million for the full year, a 12.9% increase versus last year.
- America Segment Revenue: $750 million in Q4, up 6.4% on a reported basis and 4.6% organically.
- International Segment Revenue: $195.6 million in Q4, up 1.5% on a reported basis but down 7.1% organically.
- Net Debt to Adjusted EBITDA Ratio: 1.6 times.
- Share Repurchases: Approximately $220 million for the year.
- M&A Activity: $137 million in 2024, including five bolt-on acquisitions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Allegion PLC (ALLE, Financial) reported a 5.4% increase in revenue for Q4 2024, with organic revenue growth of 3.5%, driven by favorable price and volume.
- The company achieved a 70 basis points expansion in operating margin for the full year 2024, reflecting strong operational performance.
- Allegion PLC (ALLE) executed $137 million in M&A during 2024, including five bolt-on acquisitions, enhancing its core markets and product portfolio.
- The company announced its 11th consecutive dividend increase, demonstrating a commitment to returning cash to shareholders.
- Allegion PLC (ALLE) has a strong balance sheet with a net debt to adjusted EBITDA ratio of 1.6 times, supporting continued capital deployment.
Negative Points
- The international segment faced challenges in Q4 2024, with a 7.1% decline in organic revenue, particularly impacted by a weak macroeconomic environment in Germany.
- Price and productivity, net of inflation and investment, were a slight headwind in Q4, although strong for the full year.
- The company's guidance for 2025 includes a significant headwind from foreign currency, primarily affecting Allegion International.
- Allegion PLC (ALLE) anticipates potential impacts from tariffs on imports from China and Mexico, which could affect cost structures.
- The residential business experienced a pull-forward in purchases due to inflation and tariff uncertainty, which may lead to a headwind in Q1 2025.
