We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Reasons Why You Should Avoid Betting on Allegion (ALLE) Now
Read MoreHide Full Article
Allegion plc (ALLE - Free Report) has failed to impress investors with its recent operational performance due to softness in the Allegion International segment, rising costs and foreign woes. These factors are likely to impede ALLE’s earnings in the quarters ahead.
Let’s discuss the factors, which might continue taking a toll on this Zacks Rank #4 (Sell) company.
Business Weakness: The company’s Allegion International segment is experiencing weakness due to lower volumes in the Global Portable Securities business. ALLE expects the segment’s organic revenues to decline 1-2% year over year in 2023. Softness in the non-residential and mechanical end markets is likely to weigh on Allegion’s performance in 2023.
Rising Cost and Expenses: Allegion has been dealing with the adverse impacts of the high cost of sales. Despite the cost-cutting measures undertaken by the company, in the first six months of 2023, ALLE’s cost of sales increased 22.3% year over year due to a rise in raw material costs. High costs pose a threat to the company’s bottom line.
Forex Woes: Allegion’s widespread presence in international markets exposes it to social and environmental risks as well as forex woes. A stronger U.S. dollar may depress the company's overseas business results in the quarters ahead. In second-quarter 2023, forex woes hurt the company’s total sales by 0.1%. The same had an adverse impact of 0.6%, year over year, on Allegion International’s sales in the quarter.
Southbound Estimate Revisions: In the past 60 days, the Zacks Consensus Estimate for ALLE’s 2023 earnings has been revised 0.8% downward.
Price Performance: Shares of the company have declined 1% in the year-to-date period.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below:
CAT’s earnings surprise in the last four quarters was 18.5%, on average. In the past 60 days, estimates for Caterpillar’s earnings have increased 10.4% for 2023. The stock has gained 15.1% in the year-to-date period.
Ingersoll Rand Inc. (IR - Free Report) presently sports a Zacks Rank of 1. IR’s earnings surprise in the last four quarters was 14.9%, on average.
In the past 60 days, estimates for Ingersoll Rand’s earnings have increased 3% for 2023. The stock has gained 23% in the year-to-date period.
Eaton Corporation plc (ETN - Free Report) currently carries a Zacks Rank # 2 (Buy). The company delivered a trailing four-quarter earnings surprise of approximately 3%, on average.
In the past 60 days, estimates for Eaton’s earnings have increased 3.9% for 2023. The stock has soared 37.4% in the year-to-date period.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Reasons Why You Should Avoid Betting on Allegion (ALLE) Now
Allegion plc (ALLE - Free Report) has failed to impress investors with its recent operational performance due to softness in the Allegion International segment, rising costs and foreign woes. These factors are likely to impede ALLE’s earnings in the quarters ahead.
Let’s discuss the factors, which might continue taking a toll on this Zacks Rank #4 (Sell) company.
Business Weakness: The company’s Allegion International segment is experiencing weakness due to lower volumes in the Global Portable Securities business. ALLE expects the segment’s organic revenues to decline 1-2% year over year in 2023. Softness in the non-residential and mechanical end markets is likely to weigh on Allegion’s performance in 2023.
Rising Cost and Expenses: Allegion has been dealing with the adverse impacts of the high cost of sales. Despite the cost-cutting measures undertaken by the company, in the first six months of 2023, ALLE’s cost of sales increased 22.3% year over year due to a rise in raw material costs. High costs pose a threat to the company’s bottom line.
Forex Woes: Allegion’s widespread presence in international markets exposes it to social and environmental risks as well as forex woes. A stronger U.S. dollar may depress the company's overseas business results in the quarters ahead. In second-quarter 2023, forex woes hurt the company’s total sales by 0.1%. The same had an adverse impact of 0.6%, year over year, on Allegion International’s sales in the quarter.
Southbound Estimate Revisions: In the past 60 days, the Zacks Consensus Estimate for ALLE’s 2023 earnings has been revised 0.8% downward.
Price Performance: Shares of the company have declined 1% in the year-to-date period.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below:
Caterpillar Inc. (CAT - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CAT’s earnings surprise in the last four quarters was 18.5%, on average. In the past 60 days, estimates for Caterpillar’s earnings have increased 10.4% for 2023. The stock has gained 15.1% in the year-to-date period.
Ingersoll Rand Inc. (IR - Free Report) presently sports a Zacks Rank of 1. IR’s earnings surprise in the last four quarters was 14.9%, on average.
In the past 60 days, estimates for Ingersoll Rand’s earnings have increased 3% for 2023. The stock has gained 23% in the year-to-date period.
Eaton Corporation plc (ETN - Free Report) currently carries a Zacks Rank # 2 (Buy). The company delivered a trailing four-quarter earnings surprise of approximately 3%, on average.
In the past 60 days, estimates for Eaton’s earnings have increased 3.9% for 2023. The stock has soared 37.4% in the year-to-date period.