The non-residential construction market isn’t fully back yet, but it’s definitely coming back stronger than I expected at this point, and while new starts are relatively easy to measure, it’s been much stronger (and harder-to-measure) aftermarket demand that has helped Allegion (ALLE), not to mention a residential construction market that has been on fire.
Writing on Allegion back in September of 2020 I said that Allegion needed stronger-than-expected end-markets in North America to outperform, and that’s exactly what has happened. That has propelled the shares almost 40% higher since that prior update, though that’s only a little better than the average industrial has done over that time. The valuation remains robust, and while investors are showing a lot of love for longer-cycle plays, I think it may be challenging for Allegion to outperform the expectations imbedded in the price now, as two good quarters haven’t produced much further pop in the shares.
Read more here:
Allegion Leveraging Exceptional Resi Strength, As Non-Resi Starts To Come Back
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