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With a market cap of $12.3 billion, Allegion plc (ALLE) is a global leader in mechanical and electronic security products, offering a comprehensive range of solutions. Based in Dublin, Ireland, the company serves residential, institutional, and commercial markets worldwide through diverse distribution and retail channels, including e-commerce and specialty outlets.
Shares of Allegion have slightly outperformed the broader market over the past 52 weeks. ALLE has increased 33.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 32.1%. However, in 2024, shares of ALLE are up 10.8%, lagging behind SPX’s 26.2% gain on a YTD basis.
Focusing more closely, the security device maker has lagged behind the Industrial Select Sector SPDR Fund’s (XLI) 36.3% return over the past 52 weeks and a 26.4% YTD gain.
Despite reporting stronger-than-expected Q3 adjusted EPS of $2.16 and revenue of $967.1 million, shares of Allegion fell 3.7% on Oct. 24 due to concerns over weaker-than-expected growth in its residential business, which was impacted by high mortgage rates and rising home prices. Furthermore, the international segment’s lower operating income of $17.9 million and rising interest expenses also contributed to the negative market reaction.
For the current fiscal year, ending in December, analysts expect ALLE’s EPS to grow 6.5% year-over-year to $7.41. The company's earnings surprise history is promising. It topped the consensus estimates in the last four quarters.
Among the eight analysts covering the stock, the consensus rating is a “Hold.” That’s based on two “Strong Buy” ratings, four “Holds,” one “Moderate Sell,” and one “Strong Sell.”
On Oct. 28, Barclays raised Allegion's price target to $137 and maintained an “Underweight” rating, citing improvements in its acquisition strategy and a rebound in electronic locks.
As of writing, ALLE is trading below the mean price target of $147. The Street-high price target of $165, implies a potential upside of 17.5% from the current price levels.
