Analysts have raised Allegion's fair value estimate by nearly $4 to $183.09, citing stronger industry trends and reduced downside risk supported by healthier market indicators.

Analyst Commentary

• Bullish analysts note that the majority of Allegion's Americas non-residential market has rebounded from previous softness. This indicates improved stability and growth prospects in this key segment.
• The overall industry verticals in which Allegion operates are showing healthier signals compared to the prior year. This supports a more constructive outlook for revenue and market share expansion.
• Upward adjustments to price targets reflect reduced downside risk and a firmer valuation foundation. Improved market conditions diminish prior concerns around demand volatility.
• The company’s exposure to positive industry trends is seen as a driver for enhanced execution and earnings visibility over the near term.

• Bearish analysts remain cautious regarding the full scale of recovery in non-residential markets, as some uncertainty may persist in certain sub-sectors or regions.
• Despite healthier indicators, valuation may be sensitive to any unexpected downturns in market dynamics or slower than anticipated execution on strategic initiatives.
• Potential risks include macroeconomic fluctuations and cost pressures that could affect margin expansion and sustained growth momentum.

What's in the News

• Allegion Americas and Brivo have partnered to deliver a Connected Openings solution, integrating the Schlage XE360 wireless lock with Brivo's Security Suite to provide real-time Wi-Fi enabled access control for multi-family, mixed-use, and commercial properties (Client Announcements).
• The company has completed the repurchase of 8,320,675 shares, representing 9.3% of its shares outstanding, for a total of $1,019.28 million since the buyback program began in February 2020 (Buyback Tranche Update).
• Allegion raised its 2025 full-year revenue growth outlook to 7.0% to 8.0% on a reported basis and its adjusted EPS guidance to a range of $8.10 to $8.20 (Corporate Guidance Raised).
• Zentra, part of Allegion, became the first to offer resident key capability in Google Wallet, allowing residents to unlock doors in multifamily properties using their Android devices and providing a secure, contactless experience (Product Related Announcements).
• Allegion US announced the Schlage Performance Series Locks, designed for commercial and multifamily projects to address budget constraints and rising operating expenses. These locks feature fast installation and a variety of lock functions and designs (Product Related Announcements).

Valuation Changes

• The Fair Value Estimate has increased modestly from $179.36 to $183.09, reflecting improved industry sentiment.
• The Discount Rate rose slightly from 9.03% to 9.08%, indicating a marginally higher expected return to offset risk.
• The Revenue Growth outlook has strengthened, moving from 7.39% to 7.83% to account for healthier business trends.
• The Net Profit Margin saw a minor decline from 17.36% to 17.19%, suggesting slight adjustments in profitability expectations.
• The Future P/E Ratio edged up from 22.87x to 23.00x, signaling a modestly richer valuation based on forecasted earnings.