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Allegion PLC ALLE

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Supply Chain Disruptions Will Temper Allegion's 2021 Results, but Our Long-Term Outlook Is Unchanged

Analyst Note

| Brian Bernard, CFA, CPA |

In early October, Allegion warned investors that supply chain disruptions and inflation would cause the firm's full-year financial results to fall short of management's previous guidance. Allegion's third-quarter performance reflected this tougher operating environment; compared with the prior-year quarter, reported revenue declined nearly 2% and adjusted operating margin retreated 330 basis points to 20%. But the firm is on track to achieve its downward-revised 2021 guidance for reported revenue growth (4%-4.5%), adjusted earnings ($5.00-$5.10), and free cash flow ($460-$480 million). It's worth noting that Allegion is still poised to have a record free cash flow year.

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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.

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