Allegion plc
Thesis
We recommend investors buy Allegion equity with a base case price target of $75, representing ~50% upside from the current share price. The investment thesis is supported by expected accelerating topline growth from a rebound in non-residential construction spending, significant margin improvement opportunities in Europe, effective tax optimization strategies due to Irish domiciling, and strong free cash flow generation that can be used for buybacks and M&A.
Did it work?
The investment thesis for Allegion has played out successfully, with the stock price increasing by 237.4% since the pitch, significantly exceeding the base case price target of $75. The anticipated growth from non-residential construction, margin improvements, and strong cash flow generation have all contributed positively to the company's performance over the elapsed time.
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