Published on 29 May 2024 on Zacks via Yahoo Finance

Here's Why Investing in Allegion (ALLE) Stock Makes Sense Now

Allegion plc ALLE is poised to gain from strength in the Allegion International segment, acquired assets and shareholder-friendly moves.Let’s delve into the factors that make this Zacks Rank #2 (Buy) company a smart investment choice at the moment.

Growth Catalysts

Business Strength: Strong momentum in the Allegion International segment is supporting the company’s performance. An increase in demand for electronic security products, driven by growing awareness about the security and safety of people, and infrastructure is aiding the segment. It is worth noting that the segmental revenues increased 1.4% year over year in the first quarter. Higher adoption of advanced technologies and solutions in the electronics security products market is expected to drive Allegion’s performance in the quarters ahead.Driven by strength across the business, the company expects the Allegion International segment’s revenues to increase in the range of 1.5-3.5% year over year in 2024. Allegion’s total revenues are also anticipated to increase in the band of 1.5-3.5% in 2024 from the year-ago levels, while organic sales are expected to increase in the range of 1-3%. For the year, we expect the company’s sales to increase 2.5% on a year-over-year basis.Accretive Acquisitions: Allegion is focused on strengthening its competency through business acquisitions. In the first quarter, acquisitions boosted the company’s sales by 0.3%. In March 2024, Allegion completed the acquisition of Montajes Electronics Dorcas S.L. (Dorcas), which has been incorporated into the Allegion International segment. The inclusion of Dorcas’ expertise in electric strikes and lock solutions, coupled with its strong innovation capabilities, enables Allegion to boost its security products portfolio. It also helps the company to expand its presence in lucrative end markets like healthcare and education.