Examining ASSA ABLOY Shares After Record Highs and Latest Digital Security Expansion in 2025

If you've been watching ASSA ABLOY, you know that deciding what to do with the stock is rarely straightforward. Maybe you noticed that, while the company’s shares dipped slightly by 0.8% over the last week, they are still up 2.1% for the past month and sitting on a gain of 3.6% year-to-date. Zoom out a bit, and things get even more interesting. The stock is up 5.4% over the last year, and a massive 69.3% over three years. Even over a five-year view, holders have seen returns of more than 71%. These moves suggest a company with real staying power, responding to both steady demand and broader market shifts, including a growing focus on security and digital access solutions worldwide.

Of course, price tells part of the story, but not the whole thing. The real question investors are asking is, does ASSA ABLOY still look undervalued even after these gains? According to our valuation framework, the company scores a 4 out of 6, meaning it checks the box for undervaluation in four different ways. That is a strong result and hints at potential upside, despite the already impressive long-term performance.

Let’s break down exactly how we arrive at that score. In the next section, I will walk you through each valuation method, pointing out where ASSA ABLOY shines and where there is room for improvement. If you want the most nuanced take on value, make sure to stick around until the very end.

ASSA ABLOY delivered 5.4% returns over the last year. See how this stacks up to the rest of the Building industry.

Approach 1: ASSA ABLOY Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company's intrinsic value by projecting its future cash flows and then discounting those amounts back to the present. This approach essentially asks: What are all expected future cash flows generated by ASSA ABLOY worth in today’s money?

For ASSA ABLOY, the model uses a two-stage Free Cash Flow to Equity approach. The company’s most recent reported Free Cash Flow stands at SEK 17.8 billion. Analysts project steady annual increases, with free cash flow forecast to reach SEK 25.4 billion by the end of 2029. These estimates are rooted in analyst consensus for the next five years. Simply Wall St then extends projections to complete the full 10-year outlook.

Based on these cash flow projections and an appropriate discount rate, the DCF suggests that ASSA ABLOY’s fair value is SEK 476.48 per share. This figure implies the current share price sits about 28.7% below its estimated fair value. In other words, the DCF model indicates ASSA ABLOY may be undervalued today.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for ASSA ABLOY.

Our Discounted Cash Flow (DCF) analysis suggests ASSA ABLOY is undervalued by 28.7%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: ASSA ABLOY Price vs Earnings

The Price-to-Earnings (PE) ratio is a widely used metric for valuing profitable companies like ASSA ABLOY, as it relates a company’s share price to its earnings per share. This measure gives investors a quick sense of how much they are paying for each unit of current profit, which is particularly meaningful when a company generates consistent earnings.

Generally, higher PE ratios can be justified by above-average growth expectations and lower risk profiles. Lower ratios might reflect slower growth, higher risks, or lower profit margins. For context, ASSA ABLOY’s current PE ratio sits at 25.9x. This is above the Building industry average of 20.9x, but notably below its peer group average of 33.2x. On raw multiples alone, this suggests the market is placing a premium on ASSA ABLOY, but not as high as some direct peers.

To get a more nuanced read, we use Simply Wall St’s proprietary Fair Ratio, which predicts what a fair PE multiple should be for ASSA ABLOY after weighing its growth, risk, profitability, industry, and company size. Unlike traditional comparisons that can overlook unique company advantages or risks, the Fair Ratio offers a tailored benchmark. For ASSA ABLOY, this Fair Ratio is 26.9x. With the actual PE at 25.9x, the difference is slight, suggesting the market’s valuation is very close to what is justified by the fundamentals.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your ASSA ABLOY Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let’s introduce you to Narratives. A Narrative is simply your investment story: your personal perspective that connects what you believe about a company’s future to concrete financial forecasts and a resulting fair value. Instead of relying solely on historic data or consensus numbers, Narratives let you explain the “why” behind your view by plugging in your own estimates of future revenue, profit margins, and what you think a fair share price should be.

Narratives are easy to build (and update) directly on Simply Wall St’s Community page, where millions of investors share and compare their investment stories. Each Narrative links your chosen assumptions to a real-time, dynamic fair value, then helps you make decisions by comparing it to the current price. Whenever news or earnings are released, your Narrative is automatically refreshed with the latest facts.

For example, looking at ASSA ABLOY, some investors are optimistic due to robust construction trends and the digital access opportunity, reflecting a bullish Narrative with a price target of SEK407. Others focus on risks like slow digital adoption and industry headwinds, setting a more cautious Narrative with a target of only SEK310. Narratives help you see the reasoning behind every viewpoint, so you can make smarter, faster investment decisions that actually fit your own outlook.

Do you think there's more to the story for ASSA ABLOY? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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