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Assa Abloy (ASAZY)
OTHER OTC:ASAZY
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Assa Abloy
(OTC:ASAZY)
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Select Model
Rating:65Neutral
Price Target:
$23.50
▲(25.27% Upside)
Action:ReiteratedDate:02/08/26
The score is primarily supported by solid profitability and cash generation, reinforced by constructive (but mixed) earnings-call fundamentals. It is held back by expensive valuation and technically overbought conditions, alongside near-term risks flagged on the call (notably FX headwinds and acquisition-related dilution).
Positive Factors
Record operating margins & strong operating leverage
Sustained record-quarter EBIT/EBITA margins and visible operating leverage point to durable cost discipline and scalable operations. Higher operating profitability supports cash generation and reinvestment capacity, helping the company absorb shocks and fund strategic initiatives over the next 2-6 months.
Very strong cash generation and healthier gearing
Exceptional cash conversion and moderate net leverage provide lasting financial flexibility. Strong free cash flow conversion supports dividend policy, deleveraging potential, and the firm's capacity to pursue M&A or sustain investments without immediate capital raises, underpinning structural resilience.
Shift to electromechanical products and recurring SaaS revenue
A structural move from mechanical to electromechanical solutions and growing SaaS recurring revenue increases margin quality and customer stickiness. Higher-margin, recurring streams and technology-led products improve long-term revenue durability and reduce cyclicality versus pure hardware sales.
Negative Factors
Material currency headwinds
Persistent and sizable FX translation and transaction effects materially depress reported revenue and shave margins. Currency volatility can persist across quarters, complicating guidance, compressing earnings growth, and reducing effective cash flow available for debt reduction or M&A over the medium term.
Greater China and broader APAC weakness
Substantial weakness in Greater China and muted APAC demand reduce a key growth runway and leave APAC margins well below group peers. Regional softness is structural for near-term growth forecasts and may require increased investment or pricing actions to regain share and margins over the coming quarters.
Acquisition-related dilution and underperforming asset (Level Lock)
While M&A drives scale, recent deals have caused quarter-level dilution and one acquisition (Level Lock) is underperforming. Persistent integration shortfalls and near-term dilution can impair ROIC, increase incremental investment needs, and elevate execution risk for the acquisition-driven growth strategy.
Assa Abloy (ASAZY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$46.35B
Dividend Yield1.27%
Average Volume (3M)7.08K
Price to Earnings (P/E)31.7
Beta (1Y)0.75
Revenue Growth8.40%
EPS Growth0.21%
CountryUS
Employees64,460
SectorIndustrials
Sector Strength72
IndustrySecurity & Protection Services
Share Statistics
EPS (TTM)0.21
Shares Outstanding2,110,100,000
10 Day Avg. Volume0
30 Day Avg. Volume7,078
Financial Highlights & Ratios
PEG Ratio-2.31
Price to Book (P/B)3.89
Price to Sales (P/S)2.59
P/FCF Ratio22.36
Enterprise Value/Market Cap10.65
Enterprise Value/Revenue3.25
Enterprise Value/Gross Profit7.60
Enterprise Value/Ebitda16.77
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.87
Revenue Forecast (FY)$17.06B
Assa Abloy Business Overview & Revenue Model
Company DescriptionAssa Abloy (ASAZY) is a global leader in access solutions, specializing in the development and manufacture of locks, doors, and entrance automation systems. The company operates across various sectors including residential, commercial, institutional, and industrial markets. Its core products encompass mechanical and electronic locks, access control systems, door operators, and identity management solutions, catering to the evolving needs of security and convenience in both physical and digital spaces.
How the Company Makes MoneyAssa Abloy generates revenue through multiple key streams, primarily from the sale of its extensive range of locking and access control products. The company benefits from a diversified portfolio, which includes both traditional mechanical locks and advanced electronic solutions. Major revenue sources include direct sales to end-users, distribution through third-party suppliers, and partnerships with construction and security firms. Additionally, recurring revenues are generated from service contracts, maintenance of electronic security systems, and software solutions for access management. Strategic acquisitions of complementary businesses also enhance its market position and contribute to revenue growth.
Assa Abloy Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 28, 2026
Earnings Call Sentiment Positive
Overall the call conveys a constructive and resilient operational performance: strong organic growth in Q4, record margins, exceptional cash conversion, active M&A execution and robust divisional performances (notably Global Tech and Americas). These positives were materially offset in reported results by significant FX headwinds, notable weakness in Greater China/APAC and some acquisition dilution (notably Level Lock). Management highlighted actions (pricing, cost savings, pipeline) to mitigate headwinds, but flagged near-term seasonality, FX and commodity uncertainty which may pressure Q1. On balance, the company reported strong execution and structural improvements while facing tangible short-term macro and transactional challenges.Q4-2025 Updates
Positive Updates
Record quarterly margins and operating leverage
Q4 record margins: EBIT margin 16.8% (up ~30 bps year-over-year) and EBITA margin 17.9%; strong operating leverage across the group (quarter-level operating leverage ~80 bps; Americas 120 bps; Global Tech significant leverage). EBIT in Q4 was SEK 6.5 billion.
Very strong cash generation and balance sheet metrics
Exceptional cash conversion of 137% in Q4 and 106% for the full year; continued improvement in gearing (net debt/EBITDA ~2.1x, net debt/equity ~63%). Board proposes dividend SEK 6.4 per share. Continued capacity to pursue acquisitions.
Organic growth complemented by acquisitions
Q4 organic sales growth of 4% and net acquisition growth of 3% (sales "north of SEK 38 billion" in the quarter); full year: 3% organic, 5% acquired net growth, but FX hit (-7%) reduced reported growth to +1% for the year. Company completed 7 acquisitions in Q4 and 23 over the full year representing ~SEK 6 billion annualized sales.
Strong divisional performance (Global Tech & Americas)
Global Tech: organic growth +9% in Q4 with an EBIT margin of 18.9%. Americas: organic +5% with EBIT margin 17.9% and excellent operating leverage. Regional wins: Latam +12%, Australia & New Zealand +8%, North America +4%, EMEIA organic +4%.
Electromechanical shift and recurring software momentum
Continued shift from mechanical to electromechanical with electromechanical organic sales growth of 8% in regional divisions. Recurring Software-as-a-Service revenue increased materially (from ~2% of sales in 2018 to close to ~6% today), driving higher-margin, recurring revenue streams.
Operational efficiency and cost actions
MFP savings of ~SEK 180 million in the quarter; flow-through about 40% in Q4 delivering ~80 bps EBIT accretion. Conversion costs improved (~30 bps better versus prior year for the quarter).
Active and sizable M&A pipeline with targeted strategic deals
23 acquisitions in the year (seven in Q4); highlighted strategic buys include Sargent & Greenleaf (SEK 430m sales) and International Door Products (SEK 220m sales). Company states a pipeline of potential targets (~900 identified) and reiterates ambition of ~5% acquisition growth over a cycle.
Negative Updates
Material currency headwinds
Major FX drag: ~-10% FX effect on Q4 top line leading to reported sales down ~3% despite organic +4% and acquisitions +3%. Full-year FX ~-7%; Q1 FX calculation deteriorated (mentioned -13% for Q1 in updated calculation) and FX reduced bottom-line by ~30 bps in Q4 with expectations of similar or larger impact in Q1.
Greater China and APAC weakness
APAC organic sales declined -2% in Q4. Greater China experienced high double-digit negative growth while Southeast Asia showed high double-digit positive growth, creating a mixed regional picture. APAC EBIT margin still low at 7.6% (improved from 5.4% prior year) but materially below group peers.
Residential market pressure
Persistent weakness in residential end-markets in several regions (France, parts of Southern Europe, Greater China). U.S. new-build remains weak due to mortgage/interest-rate gaps; R&R expected to recover later. Residential exposure is weighing on some divisions and geographies.
Acquisition-related dilution and underperforming asset (Level Lock)
M&A had dilutive effects in the quarter (cited ~50 bps dilution in EMEIA and Americas related to transaction costs). Level Lock acquisition has been underperforming expectations (Americas ~100 bps dilution), sales behind plan and cost adjustments were slower than anticipated; management expects Level Lock to remain dilutive in near term.
One-off disruptions and seasonality impacting near-term comparatives
Operational disruptions: a 5-day power outage (sabotage) at a Berlin factory hit January production. SKIDATA acquisition increases seasonality (cited ~50 bps negative effect in Q1). Management warns of tougher comps in Q1 versus Q4 and near-term volatility in reported results.
Raw material, tariff and pricing uncertainty
Inflation in certain commodity indexes (copper, zinc, nickel) and tariff uncertainty create input-cost risk. Management guidance for pricing in 2026 of ~1.5%–2% is contingent on material moves and market acceptance; Q4 price component was a 'low 3%' with much of prior price tied to tariffs realized mainly in the U.S.
SG&A investments and slightly weaker capital efficiency
SG&A weighed on margins (-50 bps) due to increased R&D and sales investments. Return on capital employed decreased ~20 bps year-over-year; Operational Value Added (OVA) was flat versus prior year.
Company Guidance
Management guided that pricing for 2026 should be roughly 1.5–2% (with some tariff carry‑over), warned currencies remain a major headwind (Q1 FX calc ~‑13% in the January update, full‑year FX ~‑8%) with FX already shaving ~30 bps off Q4 margins and likely larger in Q1, and reiterated a continued M&A cadence (ambition ~5% acquired net growth per year; carry‑over M&A ~1% for 2026 and ~3% in Q1) while relying on operational leverage to defend margins (record Q4 EBIT 16.8% / EBITA 17.9%; 12‑month operating margin trend 16.2% and EBITA 17.2%), expecting to offset material inflation with price measures, and pointing to strong cash metrics (Q4 cash conversion 137%, FY cash conversion 106%), a solid balance sheet (net debt/EBITDA ~2.1, net debt/equity ~63%) and a proposed dividend of SEK 6.4 per share.Assa Abloy Financial Statement Overview
Summary
Profitable with resilient gross/operating margins, mid-teens ROE, and strong free-cash-flow conversion versus net income. Offsetting this are a sharp reported 2025 revenue decline, some net margin pressure, higher leverage versus earlier years, and volatile/free-cash-flow contraction in 2025.Income Statement
Revenue expanded strongly from 2021–2024, but 2025 shows a sharp reported revenue decline (-46.2%), which materially weakens the near-term growth profile. Profitability remains solid and fairly consistent: gross margin improved over time (about 39% in 2020 to ~43% in 2025) while operating profitability stayed steady in the mid-teens; net margin has drifted down versus 2021–2022, indicating some pressure below the operating line. Overall, this is a profitable business with good margin structure, tempered by the unusually weak 2025 revenue growth and modest net margin compression.71
Positive
Balance Sheet
The balance sheet shows a moderate leverage profile with debt running at roughly two-thirds of equity in the last three years (debt-to-equity ~0.64–0.71). Debt increased meaningfully versus 2021–2022 levels, raising financial risk despite equity still remaining sizable. Returns on equity are consistently healthy in the mid-teens, suggesting efficient capital use, but the higher leverage compared with earlier years reduces flexibility if operating conditions soften.66
Positive
Cash Flow
Cash generation is solid, with free cash flow consistently high relative to net income (roughly 0.86–0.90 across the period), supporting earnings quality. However, operating cash flow covers less than half of total debt (about 0.36–0.53), implying debt paydown would take time without continued strong cash production. Free cash flow growth is also volatile, including a large contraction in 2025, which adds uncertainty even though absolute cash flow remains strong.69
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 152.41B | 150.16B | 140.72B | 120.79B | 95.01B |
| Gross Profit | 64.97B | 62.73B | 56.50B | 47.93B | 37.78B |
| EBITDA | 29.43B | 29.85B | 26.95B | 22.66B | 18.02B |
| Net Income | 14.70B | 15.64B | 13.63B | 13.29B | 10.90B |
Balance Sheet | |||||
| Total Assets | 208.37B | 223.60B | 196.35B | 154.56B | 129.97B |
| Cash, Cash Equivalents and Short-Term Investments | 1.40B | 4.53B | 1.70B | 3.42B | 4.33B |
| Total Debt | 65.35B | 73.50B | 65.19B | 33.73B | 28.75B |
| Total Liabilities | 106.65B | 116.52B | 104.71B | 68.54B | 60.38B |
| Stockholders Equity | 101.60B | 107.07B | 91.63B | 86.01B | 69.58B |
Cash Flow | |||||
| Free Cash Flow | 17.68B | 19.33B | 18.66B | 12.36B | 10.74B |
| Operating Cash Flow | 20.13B | 21.39B | 21.29B | 14.36B | 12.46B |
| Investing Cash Flow | -12.37B | -13.93B | -47.90B | -10.56B | -3.09B |
| Financing Cash Flow | -10.51B | -4.45B | 24.73B | -4.70B | -7.81B |
Assa Abloy Technical Analysis
Neutral
18.76
Price Trends
20.31
Positive
19.46
Positive
18.03
Positive
Market Momentum
0.20
Positive
49.50
Neutral
59.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ASAZY, the sentiment is Neutral. The current price of 18.76 is below the 20-day moving average (MA) of 21.22, below the 50-day MA of 20.31, and above the 200-day MA of 18.03, indicating a neutral trend. The MACD of 0.20 indicates Positive momentum. The RSI at 49.50 is Neutral, neither overbought nor oversold. The STOCH value of 59.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ASAZY.
Assa Abloy Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $1.59B | 35.32 | 26.42% | 1.29% | -2.28% | -9.94% | |
72 Outperform | $14.00B | 21.68 | 36.08% | 1.27% | 6.87% | 13.53% | |
72 Outperform | $7.68B | 27.57 | 22.22% | 1.30% | 3.31% | 2.58% | |
70 Outperform | $5.84B | 11.45 | 17.24% | 2.73% | 4.77% | -22.78% | |
65 Neutral | $46.35B | 31.68 | 13.95% | 1.27% | 8.40% | 0.21% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
56 Neutral | $5.79B | -9.50 | -16.93% | ― | 15.45% | -488.24% |
* Industrials Sector Average
ASAZY
Assa Abloy
20.85
5.86
39.07%
MSA
MSA Safety
198.18
42.29
27.13%
NSSC
Napco Security Technologies
44.67
21.20
90.34%
ALLE
Allegion
162.50
40.41
33.10%
ADT
Adt
7.12
-0.26
-3.59%
REZI
Resideo Technologies
38.29
20.69
117.56%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.