US Equities Analysis

ALLE — Allegion

Research evidence pack

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 18.88%
Profit Margins 15.24%
Return on Equity 34.18%
Return on Assets 11.03%
Free Float 0.09B
Dividend Yield 1.52%
Short Int % Utilisation 3.92%

2.2 Growth

Metric Value
Revenue Growth 9.7%
Free Cash Flow 0.49B
EBITDA 12.89 (Ratio)
Enterprise Value 13.03B
EV/Revenue 3.13
EV/EBITDA 12.89

Revenue growth of 9.7% indicates steady, moderate expansion.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 3.13%
Risk / Std Dev (Ann.)* 27.40%
1-Year Price Return* -0.65%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $164.78
52-Week Range $125.00 – $183.11
Observation Count 250 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $4.07B
Prior annual revenue $3.77B
EBIT $869.40M
Tax rate 16.22%
NOPAT = EBIT × (1 − tax rate) $728.42M
Forecast start-growth basis 7.82%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $728.42M
Add: depreciation & amortisation $133.20M
Less: capital expenditure -$98.10M
Less/(add): working-capital cash-flow movement -$19.20M
Current unlevered FCFF $744.32M

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 7.82% $785.41M $143.62M -$105.77M -$20.70M $802.55M $769.71M
2 6.49% $836.40M $152.94M -$122.72M -$22.05M $844.58M $745.09M
3 5.16% $879.57M $160.84M -$139.65M -$23.18M $877.58M $712.14M
4 3.83% $913.26M $167.00M -$156.00M -$24.07M $900.19M $671.94M
5 2.50% $936.09M $171.18M -$171.18M -$24.67M $911.42M $625.78M

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 0.84
Cost of equity 9.36%
Pre-tax cost of debt 5.08%
WACC 8.71%
WACC validation within standard range

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $15.03B
Implied terminal EV / EBITDA 11.67x
Terminal value as % of enterprise value 73.74%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $3.52B
Present value of terminal value $9.90B
Indicated enterprise value $13.42B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $13.42B
Less: gross interest-bearing debt $1.98B
Add: cash and equivalents $356.20M
Add: affiliate investments $0.00
Less: minority interests $0.00
Indicated common equity value $11.80B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 86,600,000.00
Share-count basis reported diluted weighted-average shares
Current market price $161.10
DCF indicative value per share $136.26
Indicative value vs. market price -15.42%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range pass
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% within review band

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 4/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:21:51.169799 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

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