Uncovering Potential: Allegion's Earnings Preview

Allegion ALLE is set to give its latest quarterly earnings report on Thursday, 2024-10-24. Here's what investors need to know before the announcement.

Analysts estimate that Allegion will report an earnings per share (EPS) of $1.98.

Allegion bulls will hope to hear the company announce they've not only beaten that estimate, but also to provide positive guidance, or forecasted growth, for the next quarter.

New investors should note that it is sometimes not an earnings beat or miss that most affects the price of a stock, but the guidance (or forecast).

Historical Earnings Performance

During the last quarter, the company reported an EPS beat by $0.12, leading to a 3.93% increase in the share price on the subsequent day.

Here's a look at Allegion's past performance and the resulting price change:

Allegion Share Price Analysis

Shares of Allegion were trading at $150.6 as of October 22. Over the last 52-week period, shares are up 55.08%. Given that these returns are generally positive, long-term shareholders are likely bullish going into this earnings release.

Analyst Opinions on Allegion

Understanding market sentiments and expectations within the industry is crucial for investors. This analysis delves into the latest insights on Allegion.

Analysts have given Allegion a total of 5 ratings, with the consensus rating being Neutral. The average one-year price target is $138.2, indicating a potential 8.23% downside.

Comparing Ratings with Competitors

The following analysis focuses on the analyst ratings and average 1-year price targets of Advanced Drainage Systems, A.O. Smith and Fortune Brands, three prominent industry players, providing insights into their relative performance expectations and market positioning.

• As per analysts' assessments, Advanced Drainage Systems is favoring an Outperform trajectory, with an average 1-year price target of $188.25, suggesting a potential 25.0% upside.
• A.O. Smith is maintaining an Neutral status according to analysts, with an average 1-year price target of $83.0, indicating a potential 44.89% downside.
• The prevailing sentiment among analysts is an Buy trajectory for Fortune Brands, with an average 1-year price target of $91.7, implying a potential 39.11% downside.

Peer Analysis Summary

Within the peer analysis summary, vital metrics for Advanced Drainage Systems, A.O. Smith and Fortune Brands are presented, shedding light on their respective standings within the industry and offering valuable insights into their market positions and comparative performance.

Key Takeaway:

Allegion ranks in the middle for Consensus rating. It is at the top for Revenue Growth. It is at the bottom for Gross Profit. It is at the bottom for Return on Equity.

Discovering Allegion: A Closer Look

Allegion is a global security products company with a portfolio of leading brands such as Schlage, Von Duprin, and LCN. The Ireland-domiciled company was created via a spinoff transaction from Ingersoll-Rand in December 2013. In fiscal 2023, Allegion generated 75% of sales in the United States. The company primarily competes with Sweden-based Assa Abloy and Switzerland-based Dormakaba.

Financial Insights: Allegion

Market Capitalization Analysis: Positioned below industry benchmarks, the company's market capitalization faces constraints in size. This could be influenced by factors such as growth expectations or operational capacity.

Revenue Growth: Allegion's revenue growth over a period of 3 months has been noteworthy. As of 30 June, 2024, the company achieved a revenue growth rate of approximately 5.82%. This indicates a substantial increase in the company's top-line earnings. When compared to others in the Industrials sector, the company excelled with a growth rate higher than the average among peers.

Net Margin: Allegion's financial strength is reflected in its exceptional net margin, which exceeds industry averages. With a remarkable net margin of 16.09%, the company showcases strong profitability and effective cost management.

Return on Equity (ROE): The company's ROE is a standout performer, exceeding industry averages. With an impressive ROE of 11.2%, the company showcases effective utilization of equity capital.

Return on Assets (ROA): Allegion's ROA is below industry averages, indicating potential challenges in efficiently utilizing assets. With an ROA of 3.43%, the company may face hurdles in achieving optimal financial returns.

Debt Management: Allegion's debt-to-equity ratio stands notably higher than the industry average, reaching 1.69. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.

To track all earnings releases for Allegion visit their earnings calendar on our site.

This article was generated by Benzinga's automated content engine and reviewed by an editor.