ALLE

Make better investment decisions with Simply Wall St's easy, visual tools that give you a competitive edge. Allegion stock has delivered a 39.4% return over the past three years, yet its valuation signals are mixed. A Discounted Cash Flow (DCF) estimate points to a price that is roughly in line with intrinsic value, while earnings based multiples still suggest the shares may have some undervaluation built in. Over the past three years Allegion has returned 39.4%, which puts the recent share price in a context where past gains already reflect a meaningful portion of earlier optimism. Upcoming earnings, with the focus on revenue growth by geography and product category and on margin trends, may support the current valuation if expectations on growth and profitability hold up. However, any disappointment versus these expectations could quickly pressure the multiple investors are willing to pay. With Allegion scoring 3 out of 6 on the broader valuation checks, the picture is mixed rather than a clear bargain or a clear stretch. The stock's next move may depend on whether Allegion's current price near its intrinsic value estimate still offers enough compensation for the risks around growth, margins, and cash flow that are now in focus. Find out why Allegion's -6.0% return over the last year is lagging behind its peers. The Discounted Cash Flow (DCF) method estimates what Allegion is worth today based on the cash it is expected to generate in the future. For Allegion, the model uses latest twelve month free cash flow of about $670.3 million and assumes that cash flows grow over time from current levels. On these projections, the DCF model points to an intrinsic value of about $153 per share, which is very close to the current market price. This suggests the stock is trading near its estimated cash flow value rather than at a clear discount or premium. Because the Q2 2026 earnings preview points to expectations for solid growth in revenue and EPS, the market may already be pricing Allegion in line with the cash flows analysts currently forecast. Any shift in those expectations, especially around free cash flow and margins, could move the DCF picture away from this tight alignment. Overall, Allegion screens as roughly fairly valued on a cash flow basis at today’s share price. Allegion is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Allegion. The P/E ratio is a useful lens for Allegion because earnings are a key focus for investors watching upcoming results. Allegion currently trades on a P/E of about 19.8x, compared with an industry average of roughly 22.5x and a peer group average near 47.0x, so the stock sits at a discount to both its broader sector and closer comparables. On Simply Wall St’s fair P/E estimate of about 23.8x, which adjusts for Allegion’s size, risk profile and industry context, the current multiple is also below what the model suggests as a reasonable level. That gap implies the market is asking a lower price for each dollar of Allegion’s earnings than these benchmarks would indicate, even as expectations around revenue and EPS are under close watch heading into the next earnings report. On the P/E multiple, Allegion stock appears undervalued relative to both its tailored fair ratio and its industry benchmarks. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives pick up where Allegion's valuation puzzle leaves off by spelling out which combinations of future growth, margins and earnings would need to occur for the stock to be worth materially more or materially less than today’s price. Each scenario ties a fair value to a particular set of potential catalysts and risks for Allegion, so you can track over time which version of events seems closest to reality on the Community page. Share a narrative on Allegion to add your voice to the Simply Wall St community, setting out a number-driven case on whether the upcoming earnings report, with the market watching EPS of $2.21 on revenue of $1.12b, delivers on expectations or not. It is a chance to lay out your view today and track how it holds up as the results and management commentary come through. Do you think there's more to the story for Allegion? Head over to our Community to see what others are saying! For Allegion, the Discounted Cash Flow (DCF) view points to a stock that is roughly in line with its intrinsic value, while the P/E comparison still hints at an undervalued earnings multiple. That mix, along with the broader, mixed valuation checks, leaves the stock looking more like a hold for existing expectations than a clear bargain. What matters most from here is whether Allegion delivers on the revenue and margin profile that is already implied in both the DCF assumptions and the multiple investors are currently paying for its earnings. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ALLE. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Thursday, July 23, 2026 at 8:00 a.m. ET Vice President of Investor Relations - Josh Pokrzywinski President and Chief Executive Officer - John Stone Senior Vice President and Chief Financial Officer - Michael Wagnes Operator: Good day, everyone. My name is Stefan, and I'll be your conference operator today. At this time, I'd like to welcome you to the Allegion Second Quarter Earnings Call. At this time, I'd like to turn the call over to Josh Pokrzywinski, Vice President of Investor Relations. Joshua Pokrzywinski: Thank you, Stefan. Good morning, everyone. Thank you for joining us for Allegion's Second Quarter 2026 Earnings Call. With me today are John Stone, President and Chief Executive Officer; and Mike Wagnes, Senior Vice President and Chief Financial Officer of Allegion. Our earnings release, which was issued earlier this morning and the presentation, which we will refer to in today's call, are available on our website at investor.allegion.com. This call will be recorded and archived on our website. Please go to Slide 2. Statements made in today's call that are not historical facts are considered forward-looking statements and are made pursuant to the safe harbor provisions of federal securities law. Please see our most recent SEC filings for a description of some of the factors that may cause actual results to differ materially from our projections. The company assumes no obligation to update these forward-looking statements. Today's presentation and commentary include non-GAAP financial measures. Please refer to the reconciliation in the financial tables of our press release for further details. Please go to Slide 3, and I'll turn the call over to John. John Stone: Thanks, Josh. Good morning, everyone. Thanks for joining us. Second quarter results were driven by strong organic growth in the Americas, and we see continued momentum in nonresidential indicators. Our specification activity has been robust for several quarters and includes the breadth of our core institutional markets, cyclical improvement in commercial verticals like office and multifamily and strong growth in data center, which is still small compared to some of our legacy markets, but will continue to gain relevance as that installed base grows and fuels aftermarket over time. I'm also pleased with the return to Americas margin expansion. In our International segment, we made progress on the ERP challenges experienced in the first quarter, consistent with our expectations. We saw strong sequential margin improvement and expect to build on that in the second half of the year. However, demand is weaker in several of our European markets, including Germany, which is our largest market, and we have taken additional restructuring actions in response. With respect to our full year, we're raising our reported revenue outlook to 7.5% to 8.5% and our outlook for organic revenue growth to 3.5% to 4.5% based on stronger expected demand in the Americas, partially offset by weaker international demand. We are raising our adjusted EPS outlook to $8.85 to $9.00. I'll provide additional details on this later in the call. Please go to Slide 4. Let's take a look at capital allocation, starting with our organic investments and ongoing demand trend for electronics. Higher education offers a clear example of continued secular growth in electronics. As demand for mobile technology increases on college campuses, these customers are moving from plastic cards and mechanical keys to contactless mobile credentials provided and managed by Allegion. This also drives large-scale hardware modernization. In a recent example from our team, 2 flagship university deployments turned into multimillion-dollar opportunities for our company, stemming from thousands of Allegion reader and lock upgrades paired with system-wide Allegion credential standardization. We also see off-campus housing and property managers adopting the same approach, extending secure, seamless access from the campuses where students learn into the communities where they live and connect. These upgrades deliver real benefits, simpler credential management and updates, lower installation costs, faster integration and improved security and convenience for the end user. As mobile credential adoption spreads across core institutional markets, our organic investments position Allegion to capture these hardware upgrade cycles, driving deeper customer loyalty and long-term electronics growth and shareholder value. Turning to M&A. We spent $70 million in acquisitions in the first quarter and did not complete any acquisitions in the second quarter. We continue to cultivate a pipeline of opportunities that complement our portfolio. Allegion paid $47 million in dividends, and we repurchased $120 million of Allegion shares in the second quarter. And as we've said in the past, you can expect Allegion to be balanced, disciplined and consistent with capital deployment, oriented towards profitable growth and driving long-term returns for shareholders. At current share price levels, we do see attractive valuation in our shares and expect to remain active in the second half. However, consistent with past practice, our outlook does not include additional share repurchase. Mike will now walk you through second quarter financial results. Michael Wagnes: Thanks, John, and good morning, everyone. Thank you for joining today's call. Please go to Slide #5. Revenue for the second quarter was approximately $1.2 billion, an increase of 12.7% compared to last year. Organic revenue increased 6.9% in the quarter, driven by strength in our Americas segment. The enterprise organic revenue increase was driven by both price realization and volume. Q2 adjusted operating margin was 24.2%, up 50 basis points compared to last year. Pricing and productivity, net of inflation and investment and inclusive of transactional FX was favorable by $11.8 million and was a 30 basis point tailwind to margin rate. Volume leverage was also a tailwind to margin rate in the quarter. This favorability was partially offset by acquisitions, which were a 30 basis point headwind to margins. I'll provide more details on revenue and margins within each of the regions. Adjusted earnings per share of $2.40 increased $0.36 or 17.6% versus the prior year. Operating income, inclusive of acquisitions drove the majority of the year-over-year EPS growth with a slight tailwind from tax and share count, partially offset by interest and other. Finally, year-to-date available cash flow was $260.8 million, down 5.3% from the prior year. I'll provide more details on cash flow and the balance sheet a little later in the presentation. Please go to Slide #6. Our Americas segment delivered revenue of $918.6 million, which was up 11.8% on a reported basis and up 8.9% on an organic basis. Our nonresidential business increased high single digits organically, driven by price and volume growth. Demand for our non-res products remains healthy. And as John mentioned earlier, spec activity continues to be strong. Our residential business also grew high single digits, driven by both price and volume. Resi growth in Q2 was particularly strong in electronics, which can fluctuate quarter-to-quarter. Electronics revenue for the segment was up low teens for the quarter as both res and non-res were strong. On a year-to-date basis, electronics grew high single digits, consistent with our long-term expectations. In addition, acquisitions contributed 2.9 points of growth in the quarter. Americas adjusted operating income of $276.4 million increased 12.5% versus the prior year. Adjusted operating margins were up 20 basis points in the quarter. Pricing and productivity, net of inflation and investment and inclusive of transactional FX was favorable by $10.8 million and was a 10 basis point tailwind to margins. The transactional foreign currency headwind of $2 million related to the prior year benefit that we disclosed in Q2 last year. Volume leverage was a tailwind to margin rates and acquisitions were a 40 basis point headwind as expected. Please go to Slide #7. Our International segment delivered revenue of $232.9 million, which was up 16.2% on a reported basis, but down 1.2% organically. The organic revenue decline was the result of weaker demand in some of our markets, including Germany, as John discussed earlier. Net acquisitions contributed 14.3% to segment revenue. Currency was also a tailwind, positively impacting reported revenue by 3.1%. International adjusted operating income of $28.8 million increased 9.9% versus the prior year. Adjusted operating margin for the quarter decreased 70 basis points. Price and productivity net of inflation and investment was a 120 basis point headwind to margin rate in the quarter. Volume deleverage was also a headwind to margins. These declines were partially offset by an 80 basis point tailwind from acquisitions. Margins did increase 440 basis points sequentially as the company worked to improve production rates following the ERP disruptions experienced in Q1. Please go to Slide 8, and I will provide an overview of our cash flow and balance sheet. Year-to-date available cash flow was $260.8 million, down 5.3% versus the prior year. The cash flow decrease was primarily driven by timing of sales, which were stronger later in the quarter, resulting in higher receivable balances at quarter end. For 2026, we still anticipate our ACF conversion will be approximately 85% to 95% of adjusted net income. Next, working capital as a percent of revenue increased in the second quarter due in part to acquired working capital as well as higher receivables just mentioned. Finally, our balance sheet remains healthy with net debt to adjusted EBITDA at 1.6x. I will now hand the call back over to John. John Stone: Thanks, Mike. Please go to Slide 9. Midway through the year, we are raising our organic revenue growth outlook to 3.5% to 4.5% and adjusted earnings per share outlook to $8.85 to $9.00. We're raising our reported revenue outlook to 7.5% to 8.5% based on changes to the organic growth range. You can find more details on our outlook in the appendix. In the Americas, we're raising our organic assumption to the higher end of mid-single digits, reflecting pricing associated with increased inflation as well as a healthier demand environment, primarily in nonres. We announced pricing actions in the quarter to cover the higher inflation we were experiencing, and we'll continue to monitor the tariff and input cost environment to cover additional inflationary pressures if needed. As we said in the first quarter, we expect Americas margin expansion in the second half. Our outlook does not include potential IEEPA refunds due to uncertainty on future refund timing and as we prioritize communicating with our customers first. We would not expect any potential IEEPA refund to have a material impact on EPS. For International, we expect to catch up on production impacts from the ERP implementation during the remainder of the year. And while we expect better revenue and margin performance in the second half, weak market demand in Europe, particularly Germany, supports reducing our full year outlook to a low single-digit organic decline. We're also truing up inorganic assumptions around FX and a modest reduction to M&A contribution as those businesses faced weaker markets this year as well. In total, for 2026, we expect to deliver high single-digit to low double-digit EPS growth in line with our long-term earnings framework. Consistent with prior practice, the outlook does not include the benefit of future capital deployment. And as a result, the outlook assumes a share count of 85.9 million shares. Please go to Slide 10. In summary, Allegion delivered double-digit revenue growth, high teens adjusted earnings per share growth and return capital to shareholders. We see momentum building in our largest market, which gives us confidence in our organic growth potential over the next several years. The Allegion team expects to continue delivering on our commitments and driving value for shareholders. And with that, we'll take your questions. Timothy Wojs: Can you hear me? Michael Wagnes: Yes, we can. Timothy Wojs: I just want to make sure I figure this whole tech thing out. Okay. Great. So I guess maybe just first question, I guess, particularly on the volumes in North America, I mean, it seems like the quarter itself was better from a volume perspective for you guys. I'm just kind of curious what was better relative to your expectations? And what is your expectation for Americas volume in the second half of the year? Michael Wagnes: Yes, Tim, certainly, we had a real strong second quarter from a volume and total revenue. The quarter itself was as strong as I can remember in some time. There was strength across both res and nonres. Resi demand has been really solid, and we feel we'll continue to have strong demand patterns moving forward when you think of '26 and '27. Residential, certainly stronger than we expected, high single digit at the higher end of that, obviously, with the close to 9% organic. That was a little stronger. That was driven by electronics. I would -- the one item I would note for Allegion here in the second quarter in the Americas, we did put a price increase out in the market at the end of May. That does result in customers ordering a little in advance of that. So that led to the stronger June. You could have seen a little pull forward as you think of Q3 into Q2, but not much. I mean underlying demand is in the high singles when you think about the second quarter, maybe just not as high as 9% for the segment. But overall, really good demand. And as you think moving forward, non-res feel real good. In the case of residential, encouraged by the quarter we just had. I would say the outlook doesn't assume that level of performance moving forward. I think there's -- we're a little prudent to not take 1 quarter and then extrapolate that as a trend moving forward. So I think there's more modest assumptions in residential in the outlook, although I feel good that great to see our residential business growing as strongly as it did in the second quarter. Timothy Wojs: Okay. Okay. That's helpful. And then I guess maybe just stepping back, can you -- is there any way to put numbers or any sort of kind of color or trend around what you're seeing from like a spec quoting activity and how that's kind of tracked the past 3 to 4 quarters? I'm just trying to get a better kind of visual or understanding of how that -- specifically that non-res spec activity has changed over the last 3 to 4 quarters and what that might be -- what that might mean for volumes as we think about 2027 here? John Stone: Yes. Tim, this is John. It's a good question. And I think certainly, you picked up on the commentary from Q1, where we said spec activity was strong to even very strong. That strength, that momentum has continued through second quarter. It's as strong as I've seen since I joined the company. And we're very encouraged by it. And I think certainly, we feel it supports our outlook for the current year. And with specs generally indicating or being a good indication of project work and revenue in the next 12 to 18 months, we -- as we said, we feel that this lays a good foundation for organic growth in non-res for the next couple of years. We don't release specific numbers around spec. I think it's not prudent to do that because the line of sight to revenue is always a little lumpy. So better just to let you know, like we said in the prepared remarks, we see broad-based strength across the core institutional verticals. We do see cyclical recovery in commercial verticals. AIA consensus came out this week with -- that indicates some acceleration in the commercial space into 2027. So there's more signal than noise at this point for what feels like improving non-res demand. Alexander Virgo: Hopefully, you can hear me. John Stone: Yes. Alexander Virgo: I wondered if you could talk a little bit about Europe and the evolution of demand there. I think your -- one of your main competitors last week actually reported accelerating growth in Europe, albeit slow. So I just wondered if you could give us a little bit of comment there around some of the drivers of the difference in performance and perhaps the -- a bit of color around that deceleration or deterioration that you called out in -- especially in Germany. John Stone: Yes. Very fair question and something we've been watching pretty closely. I think when you look at our exposure in Europe, primarily Southern Europe and overweighted in Germany. If you look at German -- Germany GDP growth forecast sequentially been taking that down with every update in the last 6 or 9 months, and we're feeling that. I think confident in the businesses there. They're good businesses. Our electronics businesses in Europe are very strong, great margins, been good growth. The macro backdrop in Germany has just been worsening. And so that does have an outsized impact on us. In our mechanical businesses, largely exposed to Southern Europe and countries like Italy and Spain have been hanging in there consistent with our expectations. It's not great, like you say, it's not huge, but hanging in with expectations. It's just been the sequential decline in demand in Germany that's had a bit of an outsized impact on us. Alexander Virgo: Okay. That's very helpful. And just as a kind of extension of that, I guess, the pricing side of things and the pricing that you've obviously been able to push through in the Americas, is encouraging to see. I'm guessing that the weakness in the broader market in international makes pricing a little bit more difficult. So I just wondered if you could just maybe talk a little bit about the second half and how we might think about that. Michael Wagnes: Yes. Certainly, if you think about our business, our pricing ability in North America, particularly nonresidential is our strongest across the company. I would expect, though, to see positive pricing. And as we talked about in the prepared remarks, we're also really focused on driving cost actions. So as you think about the margin performance for the international business, you should see expansion in the second half of margins, and that would be a combination of pricing, but as well as restructuring and cost activity to drive better margin performance. Rafe Jadrosich: Just to start, can you just talk a little bit about the -- obviously, the acceleration on Americas residential. Like how do you think about kind of quantifying the prebuy relative to the sell-through rate there? And just how do we think about potentially the cadence as we go through the back half of the year? Michael Wagnes: Yes. If you look at our performance in the second quarter for res, really strong electronics, and that's driven by consumers and retail channel and point of sale was good. So inventory levels at retailers are at normal levels, right? So this is not a big stocking order. Underlying demand was strong in the quarter. In the first question, I tried to address this. This is one quarter where we saw this super pleased. I think the activity is getting -- was stronger in the quarter, but the outlook doesn't assume that just yet, right? We want to see a few more quarters of positivity. In addition, just be cognizant, as you think about the prior year comp, Q3 last year was particularly strong. So as you think about resi as we progress, Q3 last year was strong, that's a tougher comp. Rafe Jadrosich: Okay. That's very helpful. And then in terms of the input cost environment, can you just talk about how that's evolved maybe over the last 3 months or so? Obviously, there's a lot of puts and takes with 232 and steel prices. I think last time you were talking about maybe a 30 basis point margin rate headwind, but dollar neutral, 1% of revenue in terms of the input cost pressure. Like is that still the case? Or has that shifted at all? Michael Wagnes: Yes. I would say, as we think about our business, tariff and inflation, right, tariff is a form of inflation. And what we're going to do is we're going to manage those inputs. We're going to drive pricing and productivity such that we're going to cover the inflation in the investments. What you saw in the second quarter is we're back to expanding margins and covering, obviously, the cost basis. Q1, a little pressure in the Americas, Q2 back to expansionary margins from PPII. I do expect for the full year, we will be neutral to slightly positive on PPII in the Americas. That would be obviously expansionary in the back half. And then finally, as you think about the quarters, just take a look at the prior year comps as well. I mentioned earlier about Q3. But in general, think of it as all the costs that we know about are in the outlook as inflation, and we've taken the necessary pricing actions to ensure that we can cover it. Jeffrey Sprague: John, I just wondered if you could shed a little more light on sort of the nature and scope of the restructuring that you're doing in Europe? And is that -- is everything you plan to do in flight there? And maybe some color on the savings or expected savings on the other side of the actions. John Stone: Yes. Jeff, I'll start and ask Mike to chime in a little bit, too. With regards to the restructurings and the cost actions we took, a couple of different flavors there. Some of it was capturing acquisition cost synergies from acquisitions we made a year ago. Some of it, though, admittedly was just in response to softer demand environments that have persisted for a little bit and just reducing the overall cost structure in a couple of those segments. In terms of how to think about it from a more quantified perspective, let me ask Mike just to add in a couple of comments. Michael Wagnes: Yes. So Jeff, if you think about the benefit, think of it as $10 million annually of cost benefit. We'll get the full run rate in Q4. The actions, though, have been addressed. They're already completed, and it's going to -- you're going to have a partial quarter in Q3. Q4 is the full quarter. And then as you think of the first half of next year, you're going to get the tailwind from the carryover. But just from a full year amount, think of it as $10 million annually, a benefit. Jeffrey Sprague: Great. And then just back to resi, one more time or at least only one more time for me. Was there anything going on with, I don't know, new product launches or anything that caused the stimulation of demand? You said there was no unusual inventory build and point of sales seem good. But like just again, curious, it seems like a surprisingly strong number. John Stone: Yes, Jeff, I think consistent with the prepared remarks and Mike's answer earlier, it was stronger than we expected in the quarter. I do think it was driven by electronics. The new product launch was a year ago. That was Q3 2025. And Mike mentioned that's what drove what's going to be a strong or a tough comp as you look into second half of this year. But I think we're running our playbook. We're running our strategy, and it's working. We've got great electronic products out there. Our resi business is 70% weighted to aftermarket and about 30% on new build. New build is still weak, and there's no denying in that. You can see what the homebuilders are reporting and their commentary out there. But the point of sale and retail, like Mike said, has been pretty strong and strong because of electronics. Tomohiko Sano: I would like to double-click on Americas nonresidential high single-digit growth in second quarter. Could you give us more color on the -- by verticals, let's say, universities, office, multifamily, John, you talked about a little bit about the data centers. How should we look at the second half outlook for those drivers as well? John Stone: Yes. Tomo, really good question. And non-res is certainly the largest part of Allegion's business, and demand has been improving. The momentum is good. The forward-looking signals around spec activity and the AIA consensus is favorable. So we feel good about that. In the slides in the prepared remarks, you saw a bit of the breakdown between pricing and volume growth. I would say, consistent with what we said on the spec activity, the project work, our customers' backlogs are very much broad-based. And you do see some cyclical recovery in commercial verticals like multifamily and office that have been depressed for the last few years. They're improving. Our institutional verticals, healthcare has been strong. Education hanging in there. We highlighted some of the work going on within higher ed, just as a few pinpoint examples for you. But broad-based is the way we would talk about the acceleration in non-res demand. Data centers, obviously, a very rapid growing space. It's small. It's probably approaching 5% of our non-res business at this point and still growing very rapidly. And that's a future installed base that will generate aftermarket sales in the coming years. So very excited about that, too. Tomohiko Sano: If I may follow up on data centers as this clients emerge as a new areas of technology-driven demand, how does Allegion differentiate yourself for the customers and versus competitors, please? John Stone: Yes. That's a great question. And I'd say really, really proud of our Americas field sales and marketing team, our spec writers, our end-user demand generation playbook is exactly what we're doing here. And I do feel we're the best at it. So getting in early in the design phase, creating end user standards that meet code, meet specification, have all the SKUs available that meet the specifics around data centers. A really important acquisition we made 2 years ago now, Krieger Specialty Products is bringing very high-technology doors, in fact, that are a new space for us, but are really helping in the data center vertical. So create the specification, create the end user standard and then meet the delivery expectations with all of these SKUs in very short lead times as the projects go. And now as these hyperscalers build new campuses, we expect to be there. John Stone: Well, thank you all for the engagement and the great Q&A, and we look forward to connecting with you on our Q3 earnings call in October. Be safe, be healthy. Before you buy stock in Allegion, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Allegion wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $369,577!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,301,557!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of July 23, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Allegion (ALLE) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Allegion PLC? Here are five stocks we like better. Allegion beat expectations and raised guidance after second-quarter revenue rose 12.7% to about $1.2 billion and adjusted EPS climbed 17.6% to $2.40. The company now expects 2026 reported revenue growth of 7.5% to 8.5% and adjusted EPS of $8.85 to $9.00. Americas was the main growth engine, with organic revenue up 8.9% on strong non-residential and residential demand. Management said momentum in office, multifamily, electronics and data centers is supporting the company’s outlook. International results were weaker, especially in Europe, as organic revenue fell 1.2% and Germany demand softened. Allegion is taking restructuring actions expected to deliver about $10 million in annual cost benefits while it works through ERP-related disruptions. The 5 Hottest CEO Stock Purchases So Far This Year Allegion (NYSE:ALLE) raised its full-year outlook after reporting double-digit revenue growth and high-teens adjusted earnings per share growth in the second quarter of 2026, driven by stronger demand in the Americas and continued momentum in non-residential markets. President and Chief Executive Officer John Stone said the quarter was supported by “strong organic growth in the Americas” and robust specification activity across the company’s core institutional markets. He also pointed to improving conditions in commercial verticals such as office and multifamily, along with growth in data centers, which he said remains a smaller market for Allegion but is becoming increasingly relevant. → 3 Photonics Companies Making Quantum Tech Possible “We see momentum building in our largest market, which gives us confidence in our organic growth potential over the next several years,” Stone said. Senior Vice President and Chief Financial Officer Mike Wagnes said second-quarter revenue was approximately $1.2 billion, up 12.7% from the prior year. Organic revenue increased 6.9%, with growth driven by both price realization and volume. → Could Truth API Become Trump Media’s First Meaningful Revenue Driver? Adjusted operating margin was 24.2%, up 50 basis points year over year. Wagnes said price and productivity, net of inflation and investment and including transactional foreign exchange, provided an $11.8 million benefit and a 30-basis-point tailwind to margin. Volume leverage also helped margins, while acquisitions were a 30-basis-point headwind. Adjusted earnings per share were $2.40, an increase of $0.36, or 17.6%, from the prior year. Wagnes said operating income, including acquisitions, drove most of the EPS growth, with smaller benefits from tax and share count, partially offset by interest and other items. → AeroVironment’s Stock Is Down, But Drone Demand Is Taking Off Year-to-date available cash flow was $260.8 million, down 5.3% from a year earlier. Wagnes attributed the decline primarily to the timing of sales, which were stronger later in the quarter and resulted in higher receivables at quarter-end. The company still expects 2026 available cash flow conversion of approximately 85% to 95% of adjusted net income. Allegion’s Americas segment reported revenue of $918.6 million, up 11.8% on a reported basis and 8.9% organically. Wagnes said non-residential revenue increased high single digits organically, driven by price and volume growth, and that demand for non-residential products remains healthy. The residential business also grew high single digits, supported by price and volume. Wagnes said residential growth in the quarter was “particularly strong in electronics,” though electronics revenue can fluctuate from quarter to quarter. Segment electronics revenue rose in the low teens in the quarter, while year-to-date electronics growth was in the high single digits, consistent with Allegion’s long-term expectations. Americas adjusted operating income rose 12.5% to $276.4 million, and adjusted operating margin expanded by 20 basis points. Acquisitions contributed 2.9 percentage points of revenue growth in the segment but were a 40-basis-point headwind to margins, as expected. In response to an analyst question, Wagnes said the Americas quarter was “as strong as I can remember in some time,” with strength across both residential and non-residential markets. He noted that a price increase announced at the end of May may have caused some customers to order ahead, benefiting June results, but said underlying demand remained strong. The International segment delivered revenue of $232.9 million, up 16.2% on a reported basis but down 1.2% organically. Wagnes said the organic decline reflected weaker demand in some markets, including Germany. Net acquisitions contributed 14.3 percentage points to segment revenue, while currency added 3.1 percentage points. International adjusted operating income increased 9.9% to $28.8 million, but adjusted operating margin declined by 70 basis points. Wagnes said price and productivity, net of inflation and investment, were a 120-basis-point margin headwind, while lower volume also weighed on margins. Acquisitions partially offset those pressures with an 80-basis-point margin tailwind. The company said International margins improved 440 basis points sequentially as Allegion worked to improve production rates following ERP-related disruptions in the first quarter. Stone said the company made progress on those ERP challenges in line with expectations and expects further improvement in the second half. However, Stone said demand has weakened in several European markets, including Germany, Allegion’s largest market in the region. He said the company has taken additional restructuring actions in response. During the Q&A session, Wagnes said those actions are expected to generate about $10 million in annual cost benefits, with the full run rate expected in the fourth quarter. Allegion raised its 2026 reported revenue growth outlook to 7.5% to 8.5% and its organic revenue growth outlook to 3.5% to 4.5%. The company also raised its adjusted EPS outlook to $8.85 to $9.00. Stone said the higher outlook reflects stronger expected demand in the Americas, partially offset by weaker international demand. In the Americas, Allegion now expects organic growth at the higher end of the mid-single-digit range, supported by pricing tied to increased inflation and healthier demand, primarily in non-residential markets. Stone said Allegion announced pricing actions during the quarter to address higher inflation and will continue monitoring tariffs and input costs. Wagnes said the company expects to cover known inflationary pressures through pricing and productivity, with Americas price and productivity net of inflation and investment expected to be neutral to slightly positive for the year. For International, Stone said Allegion expects to catch up on ERP-related production impacts during the remainder of the year. Still, weaker European demand, particularly in Germany, led the company to reduce its full-year International organic outlook to a low single-digit decline. Stone highlighted electronics as a long-term growth driver, particularly in higher education. He said universities are shifting from plastic cards and mechanical keys to contactless mobile credentials managed by Allegion, driving hardware modernization opportunities. He cited two flagship university deployments that became multimillion-dollar opportunities involving thousands of Allegion reader and lock upgrades. Stone also said data centers are growing rapidly and are approaching 5% of Allegion’s non-residential business. He said Allegion’s early involvement in design specifications, end-user standards and specialty products, including from the Krieger Specialty Products acquisition, supports its position in that market. On capital allocation, Stone said Allegion spent $70 million on acquisitions in the first quarter and completed no acquisitions in the second quarter. The company paid $47 million in dividends and repurchased $120 million of its shares in the quarter. Stone said Allegion sees “attractive valuation” in its shares at current levels and expects to remain active in the second half, though its outlook does not include additional share repurchases. Allegion plc (NYSE: ALLE) is a global provider of security products and solutions focused on ensuring the safety and security of people and property. The company was formed in December 2013 through a corporate spin-off from Ingersoll Rand and is head­quartered in Dublin, Ireland. Allegion's core mission is to deliver innovative mechanical and electronic access control systems for a wide range of end markets, including commercial buildings, residential properties, institutional facilities, and industrial sites. The company's product portfolio spans mechanical locksets, door closers, exit devices, key systems and cylinders, as well as a growing suite of electronic and smart access control offerings. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Allegion Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Americas organic growth was driven by broad-based strength in core institutional markets and a cyclical recovery in commercial verticals like office and multifamily. The company is benefiting from a secular shift in higher education as campuses transition from mechanical keys to contactless mobile credentials, triggering large-scale hardware upgrades. Data center demand is emerging as a high-growth vertical, now approaching 5% of non-residential business, which management expects will fuel a significant future aftermarket installed base. International segment performance was hampered by deteriorating macroeconomic conditions in Germany, leading to a downward revision of the full-year organic outlook for that region. Management successfully navigated Q1 ERP implementation challenges in the International segment, achieving a 440 basis point sequential margin improvement as production rates stabilized. Americas margin expansion returned in Q2, supported by pricing actions taken to offset inflationary pressures and favorable volume leverage. Full-year organic revenue growth guidance was raised to 3.5% to 4.5%, reflecting stronger Americas demand partially offset by persistent weakness in European markets. Specification activity is at multi-year highs, which management views as a leading indicator for sustained non-residential project revenue over the next 12 to 18 months. Guidance assumes a more modest performance for the residential business in the second half of the year, following a particularly strong Q2 that may have included some customer pull-forward. Management expects continued International margin expansion in the second half driven by the full run-rate impact of $10 million in annual restructuring savings. The company remains active in its M&A pipeline and share repurchases due to attractive valuations, though the formal outlook excludes the impact of future capital deployment. Restructuring actions were initiated in the International segment to align the cost structure with softer demand environments in Germany and to capture acquisition synergies. The company implemented a price increase in the Americas at the end of May to combat rising inflation and potential tariff impacts, which likely influenced June ordering patterns. Management explicitly excluded potential IEEPA refunds from the guidance due to timing uncertainty, noting they do not expect a material impact on EPS. Acquisitions acted as a 30 basis point headwind to enterprise margins in Q2, consistent with management's expectations for integration timing. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management cautioned against extrapolating the high single-digit Q2 growth, noting it was driven by strong electronics demand and some pre-buying ahead of a May price increase. Inventory levels at retail remain normal, suggesting the growth was driven by underlying consumer demand rather than channel stuffing. Spec activity is currently as strong as the CEO has seen during his tenure, providing a solid foundation for organic growth through 2027. Management cited the AIA consensus as a supporting signal for accelerating commercial demand in the coming years. The decline in International organic revenue is attributed to Allegion's specific overweighting in the German market, where GDP forecasts have been repeatedly downgraded. While mechanical business in Southern Europe remains stable, the sequential decline in Germany has had an outsized impact on the segment's performance. Allegion is utilizing its field sales team and spec writers to establish end-user standards early in the design phase of hyperscale campuses. The acquisition of Krieger Specialty Products has provided high-technology door solutions specifically suited for the technical requirements of data centers.

Allegion plc ALLE reported second-quarter 2026 adjusted earnings of $2.40 per share, up 17.6% year over year. The figure beat the Zacks Consensus Estimate of $2.23, supported by organic growth and margin expansion in the Americas segment. Allegion’s revenues were $1.15 billion, which increased 12.7% year over year. Organic revenues increased 6.9%, driven by volume growth and price realization. Revenues beat the Zacks Consensus Estimate of $1.11 billion. While acquisitions/divestitures boosted revenues by 5.1%, foreign currency had a positive impact of 0.7%.ALLE reports revenues under two segments. A brief discussion of quarterly results is provided below:Revenues from Allegion Americas increased 11.8% year over year to $918.6 million. The figure accounted for 79.8% of the quarter’s revenues. Organic revenues increased 8.9%, driven by high-single-digit growth in the non-residential and residential businesses. Operating income for the segment was $266.8 million, up 12.8% year over year.Revenues from Allegion International were $232.9 million, up 16.2% year over year. The metric accounted for 20.2% of the quarter’s revenues. Organic revenues decreased 1.2%. Segmental operating income was $14.8 million, down 5.7% year over year. Allegion PLC price-consensus-eps-surprise-chart | Allegion PLC Quote In the quarter, Allegion’s cost of revenues increased 14.1% year over year to $634 million. Gross profit was $517.5 million, up 10.9% year over year, while the gross margin declined 70 basis points (bps) to 44.9%.Selling and administrative expenses increased 6.5% year over year to $262.8 million. Adjusted EBITDA was $296.7 million, reflecting a year-over-year increase of 15%. The margin was 25.8%, up 50 basis points on a year-over-year basis.Adjusted operating income increased 15.3% year over year to $278.8 million. The adjusted margin was 24.2%, up 50 basis points year over year. Interest expenses were $24.8 million, up 0.8% year over year. The effective tax rate (on an adjusted basis) was 19.7%, down from 20.7% in the year-ago quarter. While exiting second-quarter 2026, Allegion had cash and cash equivalents of $320.6 million compared with $356.2 million at the end of 2025. Long-term debt was $2.03 billion, higher than $1.98 billion at 2025-end.In the first six months of 2026, ALLE generated net cash of $299.7 million from operating activities, reflecting a decrease of 4.6% year over year. Capital expenditure was $38.9 million compared with $38.8 million in the year-ago period. For the first six months of 2026, the available cash flow was $260.8 million.Allegion repurchased shares for $160.6 million. Dividends paid out totaled $94 million, reflecting an increase of 7.1% year over year. The company has raised its 2026 revenue guidance. Allegion expects revenues to increase in the range of 7.5-8.5% year over year, higher than 6-8% projected earlier. ALLE now expects organic revenues to grow in the range of 3.5-4.5%, up from 2-4% expected earlier.Adjusted earnings are now projected to be in the range of $8.85-$9 per share, higher than $8.70-$8.90 projected earlier. The company estimates available cash flow to be 85-95% of adjusted net income. Adjusted effective tax rate is projected to be approximately 18-19%. The company currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same space are discussed below.The Gorman-Rupp Company GRC currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.GRC delivered a trailing four-quarter average earnings surprise of 17.6%. In the past 60 days, the Zacks Consensus Estimate for The Gorman-Rupp’s 2026 earnings has remained steady.Applied Industrial Technologies AIT presently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter average earnings surprise of 4.0%.The Zacks Consensus Estimate for AIT’s fiscal 2026 (ended June 2026) earnings has improved by a penny in the past 60 days.Crane Company CR presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 11.3%.In the past 60 days, the consensus estimate for CR’s 2026 earnings has increased by 0.3%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Allegion PLC (ALLE) : Free Stock Analysis Report Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report Gorman-Rupp Company (The) (GRC) : Free Stock Analysis Report Crane Company (CR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Release Date: July 23, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Allegion PLC (NYSE:ALLE) reported strong organic growth in the Americas, driven by robust demand in non-residential sectors. The company raised its full-year revenue outlook to 7.5% to 8.5% and adjusted EPS outlook to $8.85 to $9, reflecting confidence in future performance. The Americas segment saw a significant revenue increase of 11.8% on a reported basis and 8.9% on an organic basis, with strong performance in both residential and non-residential markets. Allegion PLC (NYSE:ALLE) experienced a 17.6% increase in adjusted earnings per share, driven by operating income improvements. The company is actively investing in mobile technology and credential management, positioning itself for long-term growth in higher education and other institutional markets. Demand in several European markets, particularly Germany, remains weak, impacting the international segment's performance. The international segment experienced a 70 basis point decrease in adjusted operating margin due to weaker demand and inflationary pressures. Year-to-date available cash flow decreased by 5.3% compared to the prior year, primarily due to timing of sales and higher receivable balances. The company faced ERP challenges in the first quarter, although improvements were noted in the second quarter. Allegion PLC (NYSE:ALLE) did not complete any acquisitions in the second quarter, which may impact future growth opportunities. Warning! GuruFocus has detected 2 Warning Sign with ALLE. Is ALLE fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide insights on the volume performance in North America and expectations for the second half of the year? A: John Stone, CEO: The second quarter showed strong volume and total revenue, particularly in both residential and non-residential segments. We expect continued strong demand patterns moving forward, with residential performing at high single-digit growth. There was a price increase in May, which may have led to some advance ordering, but underlying demand remains robust. Q: How has the spec quoting activity in non-residential markets evolved over the past quarters, and what does it indicate for future volumes? A: John Stone, CEO: Spec activity has been strong and continues to be a positive indicator for future project work and revenue over the next 12 to 18 months. We see broad-based strength across core institutional verticals and recovery in commercial verticals, supporting our growth outlook for the next couple of years. Q: Could you elaborate on the demand situation in Europe, particularly in Germany, and how it compares to competitors? A: John Stone, CEO: Our exposure in Europe is primarily in Southern Europe and Germany. The macroeconomic backdrop in Germany has been worsening, impacting our mechanical businesses. However, our electronics businesses in Europe continue to perform well. The demand in Southern Europe remains consistent with expectations. Q: How is pricing being managed in the international markets given the weaker demand environment? A: Mike Waagnus, CFO: Pricing ability is strongest in North America, particularly in non-residential markets. We expect positive pricing in international markets as well, combined with restructuring and cost actions to drive better margin performance in the second half. Q: Can you provide more details on the restructuring efforts in Europe and the expected savings? A: Mike Waagnus, CFO: The restructuring actions are aimed at capturing cost synergies from past acquisitions and responding to softer demand. These actions are expected to yield an annual cost benefit of approximately $10 million, with full run-rate savings realized by Q4. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Make better investment decisions with Simply Wall St's easy, visual tools that give you a competitive edge. Allegion (ALLE) is back on investors' radar as Wall Street tracks forecasts for its upcoming quarterly report, with attention on projected earnings per share and revenue for the security products provider. Analysts currently expect Allegion to report earnings of $2.23 per share and revenue of $1.11b in the forthcoming quarter, which recent research summaries describe as increases compared with the same period a year earlier. See our latest analysis for Allegion. At a recent share price of $137.30, Allegion’s short term share price performance has been mixed, with a 30 day share price return of 2.79% but a year to date decline of 14.67%. The 3 year total shareholder return of 12.94% highlights a more resilient longer term picture as investors weigh sector demand against past drawdowns. If you are looking beyond Allegion and want to see what else is setting the pace in security, automation and access control, take a look at 34 robotics and automation stocks. Allegion’s business looks solid on headline earnings and revenue expectations. However, the stock’s recent pullback and discount to analyst targets raise a different issue: is this quality already reflected in the current price or not? Against Allegion’s last close at $137.30, the most followed narrative points to a fair value of $164, putting the focus squarely on earnings power and cash generation. Read the complete narrative. Want to see what sits behind that $164 figure? The narrative focuses on steady revenue compounding, rising margins and a higher future earnings multiple than the sector. The model assumptions are all laid out for you to review and test. Result: Fair Value of $164 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, this Allegion narrative could shift if nonresidential construction slows more sharply, or if international mechanical products continue to lag and weigh on margins. Find out about the key risks to this Allegion narrative. With Allegion presenting both concerns and reasons for optimism, it is worth moving quickly, stress testing the thesis for yourself, then weighing the 6 key rewards and 1 important warning sign. If Allegion has sharpened your thinking, do not stop here. Broaden your watchlist with other focused ideas that could round out your portfolio. Target potential mispricing by scanning for quality companies trading below estimated value through the 50 high quality undervalued stocks. Strengthen your income stream by reviewing companies with generous yields and solid payout histories using the 9 dividend fortresses. Reduce portfolio stress by searching for companies that score well on resilience with the 81 resilient stocks with low risk scores. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ALLE. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Analysts on Wall Street project that Allegion (ALLE) will announce quarterly earnings of $2.23 per share in its forthcoming report, representing an increase of 9.3% year over year. Revenues are projected to reach $1.11 billion, increasing 8.4% from the same quarter last year. Over the past 30 days, the consensus EPS estimate for the quarter has been adjusted upward by 0.5% to its current level. This demonstrates the covering analysts' collective reassessment of their initial projections during this period. Ahead of a company's earnings disclosure, it is crucial to give due consideration to changes in earnings estimates. These revisions serve as a noteworthy factor in predicting potential investor reactions to the stock. Numerous empirical studies consistently demonstrate a strong relationship between trends in earnings estimate revision and the short-term price performance of a stock. While investors typically rely on consensus earnings and revenue estimates to gauge how the business may have fared during the quarter, examining analysts' projections for some of the company's key metrics often helps gain a deeper insight. With that in mind, let's delve into the average projections of some Allegion metrics that are commonly tracked and projected by analysts on Wall Street. Based on the collective assessment of analysts, 'Net Revenues- Allegion International' should arrive at $238.42 million. The estimate indicates a change of +18.9% from the prior-year quarter. The consensus estimate for 'Net Revenues- Allegion Americas' stands at $869.73 million. The estimate indicates a year-over-year change of +5.9%. According to the collective judgment of analysts, 'Adjusted Operating Income- Allegion Americas' should come in at $260.67 million. The estimate is in contrast to the year-ago figure of $245.60 million. The consensus among analysts is that 'Adjusted Operating Income- Allegion International' will reach $28.96 million. Compared to the current estimate, the company reported $26.20 million in the same quarter of the previous year. View all Key Company Metrics for Allegion here>>> Shares of Allegion have demonstrated returns of +5.5% over the past month compared to the Zacks S&P 500 composite's -0.6% change. With a Zacks Rank #3 (Hold), ALLE is expected to mirror the overall market performance in the near future. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> . Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Allegion PLC (ALLE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Allegion plc ALLE is scheduled to release second-quarter 2026 results on July 23, before market open.The Zacks Consensus Estimate for ALLE’s second-quarter revenues is pegged at $1.11 billion, indicating growth of 8.4% from the prior-year quarter’s figure. The consensus mark for earnings is pinned at $2.23 per share, which has decreased a penny in the past 60 days. The figure indicates growth of 9.3% from the year-ago quarter's figure.The company delivered lackluster results twice in the trailing four quarters, the earnings surprise being negative 0.4% on average. In the last reported quarter, its bottom line missed the consensus estimate by 4.3%.Let us see how things have shaped up for Allegion this earnings season. Allegion’s Americas segment is expected to have performed well in the second quarter, driven by stable demand across end markets like education, healthcare, government, hospitality and retail. A rise in demand for non-residential products is expected to have aided the segment’s performance. We expect revenues from the segment to increase 4.1% year over year to $854.9 million.Allegion International segment’s performance is likely to have been augmented by solid demand for its electronic security products and effective pricing actions. We expect revenues from the segment to increase 19.2% year over year to $239.0 million. However, softness in the mechanical end market, due to disruptions from ERP implementation and decreased demand for products, is expected to have hurt the segment’s performance.Nevertheless, Allegion has remained focused on expanding its product offerings and market presence through buyouts. In March 2026, Allegion acquired DCI Hollow Metal through one of its subsidiaries. The acquisition enabled the company to strengthen its core mechanical portfolio. The company also acquired Brisant and UAP Group Limited in August 2025. The addition of Brisant’s residential security solutions portfolio strengthened its presence in the U.K. residential market while complementing its non-residential portfolio. The inclusion of UAP’s comprehensive portfolio of door hardware, backed by about 200 patents, trademarks and registered designs, boosted its presence in the U.K. non-residential market. The buyouts are expected to have boosted Allegion’s top line in the quarter.However, rising operating costs, owing to high material costs and investments in new products, channel development and growth initiatives, are expected to have affected the company’s bottom line.Also, given the company’s extensive geographic presence, its operations are exposed to foreign exchange headwinds. A stronger U.S. dollar is likely to have hurt Allegion's overseas business. Allegion PLC price-eps-surprise | Allegion PLC Quote Our proven model predicts an earnings beat for ALLE this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below. Earnings ESP: ALLE has an Earnings ESP of +1.12% as the Most Accurate Estimate is pegged at $2.25 per share, higher than the Zacks Consensus Estimate of $2.23. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.Zacks Rank: ALLE presently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here. Here are some other companies, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.Crane Company CR has an Earnings ESP of +4.73% and a Zacks Rank of 2 at present. The company is scheduled to release second-quarter 2026 results on July 28.Crane’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 11.3%.Ingersoll Rand Inc. IR has an Earnings ESP of +0.61% and a Zacks Rank of 3 at present. The company is slated to release second-quarter 2026 results on July 30.Ingersoll Rand’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters while matching the mark in two, the average surprise being 2.4%.Illinois Tool Works Inc. ITW has an Earnings ESP of +0.31% and a Zacks Rank of 3 at present. The company is slated to release second-quarter 2026 results on July 28.Illinois Tool’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 2.8%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Allegion PLC (ALLE) : Free Stock Analysis Report Illinois Tool Works Inc. (ITW) : Free Stock Analysis Report Ingersoll Rand Inc. (IR) : Free Stock Analysis Report Crane Company (CR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research