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Allegion PLC ALLE

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

After a Good Second-Quarter Performance, Allegion Is on Pace for a Strong Rebound in 2021

Analyst Note

| Brian Bernard, CFA, CPA |

Allegion's second-quarter sales and earnings growth exceeded our expectations, as the wide-moat-rated firm's end markets have rebounded faster than we had anticipated. Allegion's reported revenue increased nearly 27% year over year on a pandemic-affected comparison (second-quarter 2020 revenue was down 19% year over year). More importantly, Allegion's top line has returned to prepandemic levels, with second-quarter sales 2% above the same period in 2019. Adjusted operating margin expanded 70 basis points year over year to 19.6% due to much improved international segment profitability, which has benefited from recent restructuring. Increased operating income was the primary driver of Allegion's 44% adjusted EPS growth to $1.32 per share.

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Company Profile

Business Description

Allegion is a global security products company with a portfolio of leading brands, such as Schlage, von Duprin, and LCN. The Ireland-domiciled company was created via a spin-off transaction from Ingersoll-Rand in December 2013. In fiscal 2020, Allegion generated 74% of sales in the Americas, 20% of sales in Europe, the Middle East, and Africa, and 6% of sales in Asia-Pacific. The company mainly competes with Swedish-based Assa Abloy AB, Switzerland-based Dormakaba, and U.S.-based Spectrum Brands.

Contact
Harcourt Road, Iveagh Court, Block D
Dublin, 2, Ireland
T +353 12546200
Sector Industrials
Industry Security & Protection Services
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2019
Stock Type
Employees 11,500

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