How Is Allegion's Stock Performance Compared to Other Industrials Stocks?

Allegion plc ALLE, headquartered in Dublin, Ireland, is a leading global provider of security products and solutions. With a market cap of $11.5 billion, Allegion specializes in designing and manufacturing a wide range of access control systems, locks, and other security innovations.

Companies with a market value of $10 billion or more are classified as “large-cap stocks,” and Allegion fits this category. The company’s focus on innovation, operational excellence, and commitment to sustainability highlights its dedication to providing exceptional value to shareholders while meeting the growing demands of its customers and stakeholders worldwide.

Shares of the security hardware provider are trading 15.5% below their 52-week high of $156.10, reached on Oct. 18. The stock has gained 8.4% over the past three months, underperforming the Industrial Select Sector SPDR Fund XLI, which has gained 16.8% over the same time frame.

Over the past six months, ALLE has gained 13.5%, outperforming XLI's 9.4% increase. However, over the past 52 weeks, ALLE's growth of 3.4% lags behind XLI's 16.8% rise.

Allegion has slipped below its 50-day moving average since October, breaking its upward streak. Though it held above the 200-day average since July, it’s now dipped below, signaling a shift.

Allegion's shares dropped 3.7% following its mixed Q3 earnings report on Oct. 24. The company reported a 5.4% year-over-year increase in sales to $967.1 million, but slightly below the $970 million consensus. Earnings outperformed, with GAAP EPS of $1.99 surpassing estimates by 10.2%, while EBITDA of $248.3 million missed projections by 1.3%. 

Margins demonstrated resilience, with the operating margin rising to 22.2% from 21% in the prior year and the free cash flow margin significantly improving to 21.9% from 14.2%. Gross and EBITDA margins remained stable annually at 44.7% and 25.7%, respectively, reflecting consistent operational performance.

Allegion's competitor, A. O. Smith Corporation AOS, has underperformed ALLE and declined 16.7% over the past year.

However, analysts maintain a cautious outlook on the stock. Of the eight analysts covering ALLE, the consensus rating is "Hold," with a mean price target of $147, suggesting a substantial potential upside of 11.4% from its current price.

On the date of publication, Rashmi Kumari 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 Policyhere.

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