Allegion's Intrinsic Value: A Potential 21% Below Share Price

Allegion plc's intrinsic value is estimated to be $140, which suggests the company is potentially 27% overvalued at its current share price of $177. The analyst price target of $178 is 22% higher than the estimated intrinsic value. The two-stage free cash flow to equity method was used to arrive at the intrinsic value estimate.

Allegion plc (ALLE), a Dublin, Ireland-based security company, is set to release its fiscal Q3 earnings for 2025 later this month. The company, valued at a market cap of $15.2 billion, offers a range of mechanical and electronic security products, including locks, hinges, door closers, exit devices, steel doors and frames, access control systems, smart locking, and related workforce security software & services What You Need to Know Ahead of Allegion's Earnings Release^[1].

Analysts expect Allegion to report a profit of $2.21 per share, up 2.3% from $2.16 per share in the year-ago quarter. This performance aligns with the company's history of consistently beating Wall Street's bottom-line estimates. For the current fiscal year ending in December, analysts expect Allegion to report a profit of $8.18 per share, up 8.6% from fiscal 2024 What You Need to Know Ahead of Allegion's Earnings Release^[1].

Despite the positive earnings expectations, an analyst has estimated Allegion's intrinsic value to be $140, suggesting the company is potentially 27% overvalued at its current share price of $177. The analyst price target of $178 is 22% higher than the estimated intrinsic value, calculated using the two-stage free cash flow to equity method MP Materials' Cash Flow Under Pressure: A Turnaround on the Horizon?^[2].

Allegion's shares have rallied 21.5% over the past 52 weeks, outperforming both the S&P 500 Index and the Industrial Select Sector SPDR Fund. On July 24, shares of Allegion rose 6% after delivering impressive Q2 results, with revenue of $1 billion, up 5.8% on a reported basis and 3.2% on an organic basis What You Need to Know Ahead of Allegion's Earnings Release^[1].

Wall Street analysts are moderately optimistic about ALLE’s stock, with a "Moderate Buy" rating overall. Among 11 analysts covering the stock, three recommend "Strong Buy," and eight suggest "Hold.” The mean price target for ALLE is $178.33, indicating a marginal potential upside from the current levels What You Need to Know Ahead of Allegion's Earnings Release^[1].