Bank of America Securities analyst Andrew Obin reiterated a Sell rating on Allegion (ALLE – Research Report) yesterday and set a price target of $95.00.
Andrew Obin has given his Sell rating due to a combination of factors affecting Allegion’s market position and performance. Despite Allegion’s first quarter operations surpassing forecasts, with strong margins in the Americas and better-than-expected revenue, the company faces challenges due to soft macroeconomic conditions. The Americas residential business is under pressure from rising interest rates impacting home sales, and Allegion’s stock is trading at a premium compared to its peers. While recognizing the company’s robust market presence and successful execution, Obin expresses concern over the risks posed by increasing interest rates, potential reductions in core funding for public projects, and weaknesses in European construction.
The financial indicators also support a cautious stance. Pricing strength, which has been a positive, is showing signs of deceleration, and volume across both company segments remains negative. Important non-residential construction indicators are weakening, as seen in the deceleration of the Architecture Billings Index and declines in health care and commercial building construction spending. Despite a positive adjustment to Allegion’s expected earnings per share for the year, aligning with the company’s guidance, the broader economic and sector-specific headwinds appear to outweigh the near-term operational achievements, leading to the underperform rating with a target price of 95.00 USD.
Based on the recent corporate insider activity of 84 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ALLE in relation to earlier this year.
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Allegion (ALLE) Company Description:
Allegion Plc provides security products and solutions that keep people safe, secure and productiv. It operates through the following three geographic segments: Americas; Middle East, India, and Africa (EMEIA); and Asia Pacific. The Americas segment sells a range of products and solutions such locks, locksets, portable locks, key systems, door closers, exit devices, doors and door systems, electronic products, and access control and time and attendance systems. The EMEIA segment offers the same portfolio of products as the Americas segment as well as time and attendance and workforce productivity solutions. The Asia Pacific segment also provides the same product portfolio in addition to video analytics solutions. The company was founded on May 9, 2013 and is headquartered in Dublin, Ireland.
