Allegion(ALLE) The Motley Fool·2025-04-24 16:14Core Viewpoint - Allegion's stock rose by 10.3% following the release of its first-quarter earnings report, indicating strong investor confidence in the company's value despite challenges in the residential housing market [1]. Company Performance - Allegion maintained its full-year guidance for mid-single-digit revenue growth and adjusted earnings per share (EPS) of $7.65-$7.85, which was sufficient to trigger a stock rally [3]. - The company experienced a 4.9% increase in organic sales, driven by a 1.1% price realization and a 3.8% volume growth [6]. Market Conditions - The residential housing market is facing pressure from high interest rates and tariff-related uncertainties, impacting manufacturers' ability to pass on increased supply chain costs [2]. - Despite weak residential sales in the Americas, which declined at a mid-single-digit rate, nonresidential sales increased by a high-single-digit rate, offsetting the losses [4]. Growth Prospects - Allegion is positioned well in the market due to the convergence of electronics and mechanics in lock security, particularly with web-enabled electronic locks that enhance access control and monitoring [4][5]. - The company's electronics sales rose by a low double-digit rate in the quarter, reflecting strong demand for its innovative products [5]. Valuation - Trading at less than 18 times the midpoint of management's 2025 EPS guidance, Allegion is considered an excellent investment opportunity for those who believe in the long-term potential of electronic locks and access doors [6].