- 2025 Revenue Growth: Enterprise revenue grew high single digits in 2025, with $600M+ in accretive M&A and solid execution amid inflation.
- 2026 EPS Guidance: Adjusted EPS targets $8.70–$8.90/share (8% growth midpoint), driven by Americas nonresidential and International electronics growth.
- Americas Performance: Q4 revenue rose 6.1% reported/4.8% organic, led by nonresidential business (+high single digits organically).
- International Segment Dynamics: 21.5% reported revenue growth offset by -2.3% organic decline, with electronics outperforming mechanical categories.
- 2026 Revenue Outlook: Total revenue growth of 5–7%, organic growth of 2–4%, prioritizing nonresidential Americas and electronics-led International growth.
Segment Performance
The Americas segment's resilience in Q4 was driven by nonresidential business growth, which increased by high single digits organically. The International segment's growth was largely driven by electronics businesses, with net acquisitions contributing 16 points to segment revenue. As noted by John Stone, "We expect total Allegion revenue growth to be 5% to 7% and organic revenue growth to be 2% to 4%" in 2026, with the Americas segment expected to lead the growth.
Guidance and Outlook
Allegion initiated fiscal year 2026 adjusted EPS guidance of $8.70 to $8.90 per share, representing growth of approximately 8% at the midpoint. The company's outlook assumes continued growth led by Americas nonresidential, with a more modest price contribution due to lower inflation. Analysts estimate revenue growth of 4.5% for the next year, which is within the company's guided range.
Valuation Metrics
Allegion's current valuation metrics indicate a P/E Ratio of 21.75, P/B Ratio of 5.63, and EV/EBITDA of 16.13. The company's ROE is 32.9%, and ROIC is 16.12%. The Dividend Yield is 1.25%, and Free Cash Flow Yield is 5.02%. These metrics suggest that the company's stock is fairly valued, with a reasonable price-to-earnings multiple and a decent dividend yield.
Margin Performance
The company's margin performance was impacted by higher costs, but was supported by pricing and productivity gains. As Michael Wagnes noted, "We put all that information in our 10-K... We'll see a little less pricing in total, with enterprise and Americas revenue experiencing a bit more pricing than volume." The company's Americas margins in Q4 were down year-over-year due to a substantial residential volume decline, despite positive pricing.