Legrand (ENXTPA:LR) - Share price, News & Analysis

Q: What is the Fair Price of LR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

LR (€71.08) is trading below our estimate of [[fair value]] (€98.43)

LR fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	1/6
Past Performance	3/6
Financial Health	3/6
Dividends	5/6

LR Stock Overview

Legrand SA, together with its subsidiaries, provides electrical and digital building infrastructures worldwide.

Rewards

Trading at 27.8% below our estimate of its fair value

Earnings are forecast to grow 6.58% per year

Earnings have grown 4.9% per year over the past 5 years

Pays a reliable dividend of 2.32%

Trading below our calculated fair Price-To-Earnings ratio

Analysts in good agreement that stock price will rise by 20.5%

Risk Analysis

No risks detected for LR from our risk checks.

Legrand Competitors

Schneider Electric

ENXTPA:SU

€68.8b

Nexans

ENXTPA:NEX

€4.2b

Somfy

ENXTPA:SO

€3.5b

Mersen

ENXTPA:MRN

€616.7m

Price History & Performance

Summary of all time highs, changes and price drops for Legrand
Historical stock prices
Current Share Price	€71.08
52 Week High	€104.45
52 Week Low	€64.44
Beta	1.02
1 Month Change	-3.42%
3 Month Change	-0.67%
1 Year Change	-21.89%
3 Year Change	9.15%
5 Year Change	15.09%
Change since IPO	206.12%

Recent News & Updates

Sep 26

Legrand (EPA:LR) Might Be Having Difficulty Using Its Capital Effectively

If you're looking for a multi-bagger, there's a few things to keep an eye out for. Firstly, we'll want to see a proven...

Sep 13

Is Now The Time To Put Legrand (EPA:LR) On Your Watchlist?

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks...

Aug 07

Is Legrand (EPA:LR) A Risky Investment?

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

Shareholder Returns

	LR	FR Electrical	FR Market
7D	8.3%	2.1%	0.5%
1Y	-21.9%	-18.5%	-11.3%

Return vs Industry: LR underperformed the French Electrical industry which returned -18.5% over the past year.

Return vs Market: LR underperformed the French Market which returned -11.3% over the past year.

Price Volatility

Is LR's price volatile compared to industry and market?
LR volatility
LR Average Weekly Movement	3.7%
Electrical Industry Average Movement	5.2%
Market Average Movement	4.9%
10% most volatile stocks in FR Market	9.3%
10% least volatile stocks in FR Market	2.8%

Stable Share Price: LR is less volatile than 75% of French stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: LR's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1865	38,051	Benoît Coquart	https://www.legrandgroup.com

Legrand SA, together with its subsidiaries, provides electrical and digital building infrastructures worldwide. The company offers MCBs, RCDs, and din rail equipment, including residual current circuit breakers, RCBOs, add-on modules and accessories, surge protective devices, other control and signaling devices, and time and light-sensitive switches, as well as dimmers, relays, transformers, power supplies, and accessories; ACBs, MCCBs, head equipment, and busbar systems; enclosures and accessories; equipment and accessories; home network, home automation, and hotel equipment; wiring accessories; weatherproof wiring accessories and other installation equipment; lighting management, emergency lighting, access control, and safety equipment; UPS and LCS products, cable management systems, equipment, and accessories; and mosaic wiring accessories. Its products are used in hotels, offices, data centers, industrial sites, shops, hospitals, schools, and universities, as well as residential, commercial, and industrial buildings.

Legrand Fundamentals Summary

How do Legrand's earnings and revenue compare to its market cap?
LR fundamental statistics
Market Cap	€18.09b
Earnings (TTM)	€971.30m
Revenue (TTM)	€7.63b

19.5x

P/E Ratio

2.5x

P/S Ratio

Is LR overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
LR income statement (TTM)
Revenue	€7.63b
Cost of Revenue	€3.85b
Gross Profit	€3.78b
Other Expenses	€2.81b
Earnings	€971.30m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Nov 03, 2022

Earnings per share (EPS)	3.64
Gross Margin	49.52%
Net Profit Margin	12.72%
Debt/Equity Ratio	82.6%

How did LR perform over the long term?

See historical performance and comparison

Dividends

2.3%

Current Dividend Yield

45%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is LR undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for LR?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for LR. This is calculated by dividing LR's market cap by their current preferred multiple.
What is LR's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	€18.09b

LR key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2.7x
Enterprise Value/EBITDA	12.8x
PEG Ratio	3x

Price to Earnings Ratio vs Peers

How does LR's PE Ratio compare to its peers?

LR PE Ratio vs Peers

The above table shows the PE ratio for LR vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	14.5x
SU Schneider Electric	21.7x	7.7%	€68.8b
NEX Nexans	15.1x	6.2%	€4.2b
SO Somfy	14.7x	4.1%	€3.5b
MRN Mersen	9.6x	9.1%	€616.7m
LR Legrand	19.5x	6.6%	€19.0b

Price-To-Earnings vs Peers: LR is expensive based on its Price-To-Earnings Ratio (19.5x) compared to the peer average (15.3x).

Price to Earnings Ratio vs Industry

How does LR's PE Ratio compare vs other companies in the European Electrical Industry?

Price-To-Earnings vs Industry: LR is expensive based on its Price-To-Earnings Ratio (19.5x) compared to the European Electrical industry average (18.1x)

Price to Earnings Ratio vs Fair Ratio

What is LR's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LR PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	19.5x
Fair PE Ratio	19.9x

Price-To-Earnings vs Fair Ratio: LR is good value based on its Price-To-Earnings Ratio (19.5x) compared to the estimated Fair Price-To-Earnings Ratio (20x).

Share Price vs Fair Value

What is the Fair Price of LR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: LR (€71.08) is trading below our estimate of fair value (€98.43)

Significantly Below Fair Value: LR is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is Legrand forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

6.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: LR's forecast earnings growth (6.6% per year) is above the savings rate (0.3%).

Earnings vs Market: LR's earnings (6.6% per year) are forecast to grow slower than the French market (11% per year).

High Growth Earnings: LR's earnings are forecast to grow, but not significantly.

Revenue vs Market: LR's revenue (4.1% per year) is forecast to grow slower than the French market (5.3% per year).

High Growth Revenue: LR's revenue (4.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: LR's Return on Equity is forecast to be low in 3 years time (16.6%).

Discover growth companies

Past Performance

How has Legrand performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

4.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: LR has high quality earnings.

Growing Profit Margin: LR's current net profit margins (12.7%) are lower than last year (13%).

Past Earnings Growth Analysis

Earnings Trend: LR's earnings have grown by 4.9% per year over the past 5 years.

Accelerating Growth: LR's earnings growth over the past year (10.8%) exceeds its 5-year average (4.9% per year).

Earnings vs Industry: LR earnings growth over the past year (10.8%) underperformed the Electrical industry 20.6%.

Return on Equity

High ROE: LR's Return on Equity (15.3%) is considered low.

Discover strong past performing companies

Financial Health

How is Legrand's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: LR's short term assets (€5.6B) exceed its short term liabilities (€3.0B).

Long Term Liabilities: LR's short term assets (€5.6B) do not cover its long term liabilities (€5.7B).

Debt to Equity History and Analysis

Debt Level: LR's net debt to equity ratio (39.7%) is considered satisfactory.

Reducing Debt: LR's debt to equity ratio has increased from 52.2% to 82.6% over the past 5 years.

Debt Coverage: LR's debt is not well covered by operating cash flow (16.6%).

Interest Coverage: LR's interest payments on its debt are well covered by EBIT (17.7x coverage).

Balance Sheet

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Dividend

What is Legrand current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

2.32%

Current Dividend Yield

Dividend Yield vs Market

Legrand Dividend Yield vs Market

How does Legrand dividend yield compare to the market?
Segment	Dividend Yield
Company (Legrand)	2.3%
Market Bottom 25% (FR)	2.0%
Market Top 25% (FR)	6.0%
Industry Average (Electrical)	2.4%
Analyst forecast in 3 Years (Legrand)	2.7%

Notable Dividend: LR's dividend (2.32%) is higher than the bottom 25% of dividend payers in the French market (2%).

High Dividend: LR's dividend (2.32%) is low compared to the top 25% of dividend payers in the French market (6.02%).

Stability and Growth of Payments

Stable Dividend: LR's dividends per share have been stable in the past 10 years.

Growing Dividend: LR's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (45.3%), LR's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (63%), LR's dividend payments are covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.8yrs

Average management tenure

CEO

Benoît Coquart (49 yo)

2.42yrs

Tenure

€1,740,822

Compensation

Mr. Benoît Coquart has been the Chief Executive Officer at Legrand SA since February 08, 2018. Mr. Coquart is responsible for the general management of Legrand. Mr. Coquart served as an Executive Vice Pres...

CEO Compensation Analysis

Benoît Coquart's Compensation vs Legrand Earnings

How has Benoît Coquart's remuneration changed compared to Legrand's earnings?
Date	Total Comp.	Salary	Company Earnings
Jun 30 2022	n/a	n/a	€971m
Mar 31 2022	n/a	n/a	€935m
Dec 31 2021	n/a	n/a	€905m
Sep 30 2021	n/a	n/a	€887m
Jun 30 2021	n/a	n/a	€877m
Mar 31 2021	n/a	n/a	€742m
Dec 31 2020	€2m	€700k	€681m
Sep 30 2020	n/a	n/a	€703m
Jun 30 2020	n/a	n/a	€705m
Mar 31 2020	n/a	n/a	€812m
Dec 31 2019	€3m	€700k	€835m
Sep 30 2019	n/a	n/a	€822m
Jun 30 2019	n/a	n/a	€797m
Mar 31 2019	n/a	n/a	€787m
Dec 31 2018	€2m	€627k	€772m

Compensation vs Market: Insufficient data to establish whether Benoît's total compensation is reasonable compared to companies of similar size in the French market.

Compensation vs Earnings: Benoît's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: LR's management team is considered experienced (3.8 years average tenure).

Board Members

Experienced Board: LR's board of directors are considered experienced (7.9 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

What is the ownership structure of LR?
Owner Type	Number of Shares	Ownership Percentage
Individual Insiders	4,678,385	1.8%
General Public	120,780,057	45.3%
Institutions	141,191,396	53.0%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Top Shareholders

Top 25 shareholders own 43.47% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
9.99%	Massachusetts Financial Services Company	26,641,639	€1.9b	-0.53%	0.46%
5.12%	BlackRock, Inc.	13,653,203	€970.5m	0%	0.02%
4.14%	Norges Bank Investment Management	11,036,673	€784.5m	0%	0.1%
3.76%	The Vanguard Group, Inc.	10,013,626	€711.8m	1.3%	0.02%
3.37%	FMR LLC	8,974,687	€637.9m	0.28%	0.06%
2.6%	Flossbach von Storch AG	6,928,140	€492.5m	0%	1.19%
1.8%	Fidelity International Ltd	4,791,769	€340.6m	0%	0.17%
1.39%	Allianz Asset Management AG	3,707,616	€263.5m	0%	0.22%
1.25%	Amundi Asset Management	3,342,851	€237.6m	1.18%	0.07%
1.14%	First Eagle Investment Management, LLC	3,045,260	€216.5m	0%	0.35%
1.03%	Pictet Asset Management Limited	2,742,891	€195.0m	0%	0.17%
0.91%	Gilles Schnepp	2,415,082	€171.7m	0%	no data
0.78%	Olivier Bazil	2,085,299	€148.2m	0%	no data
0.69%	T. Rowe Price Group, Inc.	1,833,154	€130.3m	-0.06%	0.01%
0.63%	Janus Henderson Group plc	1,679,342	€119.4m	-0.06%	0.06%
0.62%	BNY Mellon Asset Management	1,644,155	€116.9m	-0.39%	0.02%
0.59%	Baillie Gifford & Co.	1,569,435	€111.6m	-6.39%	0.05%
0.55%	Geode Capital Management, LLC	1,467,460	€104.3m	0.86%	0.01%
0.52%	Schroder Investment Management Limited	1,375,101	€97.7m	0%	0.07%
0.51%	UBS Asset Management	1,372,501	€97.6m	-1.61%	0.02%
0.5%	Jupiter Fund Management Plc	1,338,800	€95.2m	0%	0.3%
0.5%	Natixis Investment Managers International	1,332,901	€94.7m	13.22%	0.36%
0.38%	BLI - Banque De Luxembourg Investments S.A.	1,002,055	€71.2m	-0.16%	0.79%
0.37%	Columbia Management Investment Advisers, LLC	990,188	€70.4m	5.79%	0.02%
0.35%	State Street Global Advisors, Inc.	922,023	€65.5m	-1.92%	no data

Ticker	Exchange	Primary Security	Security Type	Country	Currency	Listed on
LRC	DB (Deutsche Boerse AG)	Yes	Ordinary Shares	DE	EUR	Jul 2000
0MW7	LSE (London Stock Exchange)	Yes	Ordinary Shares	GB	EUR	Jul 2000
LGRV.F	OTCPK (Pink Sheets LLC)	Yes	Ordinary Shares	US	USD	Jul 2000
LR	ENXTPA (Euronext Paris)	Yes	Ordinary Shares	FR	EUR	Jul 2000
LRP	BATS-CHIXE (BATS 'Chi-X Europe')	Yes	Ordinary Shares	GB	EUR	Jul 2000
LR	WBAG (Wiener Boerse AG)	Yes	Ordinary Shares	AT	EUR	Jul 2000
LGRD.Y	OTCPK (Pink Sheets LLC)		UNSPON ADR EACH REPR 0.20 ORD	US	USD	Oct 2014

Data	Last Updated (UTC time)
Company Analysis	2022/10/04 00:00
End of Day Share Price	2022/10/04 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31