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Allegion (ALLE) to Post Q1 Earnings: Is a Beat in the Cards?

Allegion plc ALLE is slated to report first-quarter 2021 results on Apr 22, before market open.

The company delivered better-than-expected results in each of the last four quarters. Earnings surprise in the last four quarters was a positive 24.32%, on average. Its fourth-quarter 2020 adjusted earnings of $1.49 per share surpassed the Zacks Consensus Estimate of $1.17 by 27.35%.

In the past three months, shares of Allegion have gained 15% compared with the industry’s growth of 9.5%.

Factors at Play

Allegion is anticipated to have benefited from its investments for product development and channel initiatives in the first quarter. Growing popularity of the company’s electronic security products such as Schlage and Interflex is likely to have boosted its performance in the quarter. Also, its pricing, productivity and supply chain initiatives are expected to have been beneficial. In addition, several cost saving and restructuring actions undertaken by the company are anticipated to have helped it maintain a healthy margin performance.

Coming to operating segments, strong momentum across Allegion’s residential businesses, backed by strength across the new construction and retail end markets, is likely to have supplemented its Americas segment’s top-line performance in the first quarter. Also, healthy demand across home builder markets and point-of-sales in the e-commerce channels might have supported the segment’s performance. However, challenged demand environment across the non-residential markets, owing to the coronavirus outbreak, is expected to have had a bearing on the segment’s performance.

Strength in the company’s Global Portable Security and SimonsVoss businesses is expected to have acted as a tailwind for its International segment. However, the lingering effects of the pandemic-related issues are likely to have adversely impacted the segments’ top line.

Also, it’s worth mentioning that Allegion’s investments related to product development, restructuring actions and integration of acquired asset of Yonomi (January 2021) activities might have adversely impacted its earnings in the first quarter.

Earnings Whispers

Our proven model predicts an earnings beat for Allegion this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

This is the case here as given below:

Earnings ESP: The company has an Earnings ESP of +1.96% as the Most Accurate Estimate is pegged at $1.04, higher than the Zacks Consensus Estimate of $1.02.

Allegion plc Price and EPS Surprise

Allegion plc price-eps-surprise | Allegion plc Quote

Zacks Rank: Allegion carries a Zacks Rank #3.

Other Key Picks

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

Deere Company DE has an Earnings ESP of +7.02% and it currently sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Applied Industrial Technologies, Inc. AIT has an Earnings ESP of +3.59% and a Zacks Rank #2.

Colfax Corporation CFX has an Earnings ESP of +0.89% and a Zacks Rank #3.

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