Allegion Q3 Earnings: Can NYSE:ALLE Hit Its $1.20 EPS Target?

in EARNINGS/INVESTING IDEAS by

Allegion plc (NYSE:ALLE) is scheduled to report Q3 earnings results before markets open for trading on October 22, 2020.

The company is expected to report earnings of $1.20/share on revenue of $668.4 million. The consensus earnings per share (EPS) of $1.20/share is based on a poll of 10 analysts and represents a decline in eps of −18.3% over the same quarter last year, when the company reported earnings of $1.47/share.

The revenue forecast of $668.4 million based on a poll of 9 analysts implies a year-over-year (YoY) decline in revenue of −10.7%. Last year the company reported $748.3 million in revenue for the quarter.

Expected to report EPS contraction of −18.3% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $668.40 $748.30 −10.7%
EPS $1.20 $1.47 −18.3%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, missed 2 quarters, and met expectations 1 quarters.

What are your expectations from Allegion plc for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.83 $0.92 10.8% Beat
Q1, 2020 $0.88 $1.04 17.9% Beat
Q4, 2019 $1.28 $1.28 −0.3% Missed
Q3, 2019 $1.33 $1.47 10.9% Beat
Q2, 2019 $1.32 $1.26 −4.4% Missed
Q1, 2019 $0.87 $0.88 1.3% Beat
Q4, 2018 $1.22 $1.22 0.2% Beat
Q3, 2018 $1.21 $1.23 1.3% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −9.5%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 23, 2020 $111.60 $101.02 −9.5% Decline
April 23, 2020 $92.97 $96.57 3.9% Increase
February 18, 2020 $138.90 $131.16 −5.6% Decline
October 24, 2019 $104.37 $113.33 8.6% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.99, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.99 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Allegion plc is currently trading at $103.93/share, down −1.0% for the day. The company is trading at approximately 74.6% of its 52-week high of $139.24/share. The company’s stock price is up 2.9% since the last earnings report and down −1.1% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 55.81 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:ALLE Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 33.47 and a forward P/E multiple of 24.49.

Allegion plc’s current share price also implies a price-to-book (P/B) multiple of 14.15. The following table summarizes some other key fundamental ratios:

Data as of October 20, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $103.93
P/E Ratio 33.5x
P/E Ratio (Fwd) 24.5x
PEG Ratio −1.0
Total Debt / Total Capital 13.3%
Levered Free Cash Flow $448.5 million
EV / EBITDA 17.6x

Finbox

Allegion plc is a mid-cap stock with a market capitalization of $9.586 billion and a total enterprise value of $10.789 billion. The company operates in the Industrials sector and the Building Products industry.

Allegion plc manufactures and sells mechanical and electronic security products and solutions worldwide. The company offers door closers and controls; doors and door systems; electronic security products; electronic, biometric and mobile access control systems; exit devices; locks, locksets, portable locks, and key systems; time, attendance, and workforce productivity systems; and other accessories. The company sells its products and solutions to end-users in commercial, institutional, and residential facilities, including education, healthcare, government, hospitality, commercial office, and single and multi-family residential markets under the CISA, Interflex, LCN, Schlage, SimonsVoss, and Von Duprin brands. It sells its products and solutions through distribution and retail channels, such as specialty distribution, e-commerce, and wholesalers, as well as through various retail channels comprising do-it-yourself home improvement centers, on-line and e-commerce platforms, and small specialty showroom outlets. Allegion plc was incorporated in 2013 and is headquartered in Dublin, Ireland.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.