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Allegion (ALLE) to Report Q4 Earnings: What's in the Cards?

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Zacks Equity Research
·4 min read
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Allegion plc ALLE is slated to report fourth-quarter 2020 results on Feb 16, before market open.

The company delivered better-than-expected results thrice in the last four quarters, while meeting estimates once. Earnings surprise in the last four quarters was a positive 17.48%, on average. Notably, its third-quarter 2020 adjusted earnings of $1.67 per share surpassed the Zacks Consensus Estimate of $1.20 by 39.17%.

In the past three months, shares of Allegion have gained 7% compared with the industry’s growth of 20.2%.

Factors at Play

Allegion is expected to have benefited from improvement in demand across home builder markets and point-of-sales in the e-commerce channels in the fourth quarter. Also, the company’s pricing, productivity and supply chain initiatives, along with its actions to optimize and simplify business operations, are expected to have boosted its performance.

Coming to operating segments, strength across the company’s residential business backed by healthy backlog is likely to have supplemented the Americas segment’s sales in the fourth quarter. However, challenging conditions in the commercial and institutional end markets are expected to have had a bearing on its top-line performance. Amid this backdrop, the Zacks Consensus Estimate for fourth-quarter 2020 revenues of the Americas segment is currently pegged at $504 million, suggesting a decrease of 6.5% from the previous quarter’s reported number.

In addition, strength in the company’s Global Portable Security and SimonsVoss businesses is expected to have acted as a tailwind for its Europe, Middle East, India and Africa (EMEIA) segment. However, challenged demand environment across Korean and Australian end markets is expected to have adversely impacted the Asia Pacific segments’ top-line performance. Notably, the consensus estimate for fourth-quarter revenues from the EMEIA segment currently stands at $150 million, indicating a 1.4% sequential increase, whereas that for the Asia Pacific segment is currently pegged at $39.6 million, indicating decline of 3.2% from the previous-quarter reported figure.

Earnings Whispers

According to our quantitative model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or at least 3 (Hold) to increase the odds of an earnings beat. But that is not the case here as we will see below.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Allegion has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.17.

Allegion plc Price and EPS Surprise

Allegion PLC Price and EPS Surprise
Allegion PLC Price and EPS Surprise

Allegion plc price-eps-surprise | Allegion plc Quote

Zacks Rank: It carries a Zacks Rank #2.

Key Picks

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Axon Enterprise, Inc AXON has an Earnings ESP of +2.34% and a Zacks Rank #2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Altra Industrial Motion Corp. AIMC presently has a Zacks Rank #2 and an Earnings ESP of +0.48%.

The Middleby Corporation MIDD currently has a Zacks Rank #2 and an Earnings ESP of +6.20%.

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