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Franklin Electric Co. (FELE)
NASDAQ:FELE

Franklin Electric Co (FELE) AI Stock Analysis

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Franklin Electric Co

(NASDAQ:FELE)

Rating:75Outperform
Price Target:
$98.00
▲(5.39%Upside)
Franklin Electric Co receives a strong overall stock score of 75, driven primarily by its solid financial performance and positive corporate events. Technical analysis and valuation indicate moderate risk, while the earnings call suggests a balanced outlook. The company's strategic moves, including share repurchases and new credit agreements, enhance its stability and growth potential.

Franklin Electric Co (FELE) vs. SPDR S&P 500 ETF (SPY)

Franklin Electric Co Business Overview & Revenue Model

Company DescriptionFranklin Electric Co., Inc., together with its subsidiaries, designs, manufactures, and distributes water and fuel pumping systems worldwide. It operates through three segments: Water Systems, Fueling Systems, and Distribution. The Water Systems segment offers submersible motors, pumps, drives, electronic controls, water treatment systems, monitoring devices, and related parts and equipment. Its motors and pumps are used principally for pumping clean water and wastewater in various residential, agricultural, municipal, and industrial applications; and manufactures electronic drives and controls that are used in motors for controlling functionality, as well as provides protection from various hazards, such as electrical surges, over-heating, and dry wells or tanks. The Fueling Systems segment provides pumps, pipes, sumps, fittings, vapor recovery components, electronic controls, monitoring devices, and related parts and equipment primarily for use in fueling system applications. This segment serves other energy markets, such as power reliability systems, as well as includes electronic devices for online monitoring of the power utility, hydroelectric, and telecommunication and data center infrastructure. The Distribution segment sells to and provides presale support and specifications to the installing contractors. It sells products produced by the Water Systems segment. The company sells its products to wholesale and retail distributors, specialty distributors, original equipment manufacturers, industrial and petroleum equipment distributors, and oil and utility companies through its employee sales force and independent manufacturing representatives. Franklin Electric Co., Inc. was founded in 1944 and is headquartered in Fort Wayne, Indiana.
How the Company Makes MoneyFranklin Electric generates revenue primarily through the sale of its water and fueling systems, which include a comprehensive range of pumps, motors, and related components. The company capitalizes on its extensive distribution network, offering its products to wholesalers, distributors, and original equipment manufacturers (OEMs). Key revenue streams involve the Water Systems segment, which provides high-margin products for groundwater, surface water, and wastewater applications, and the Fueling Systems segment, which offers products for the safe and efficient transfer of fuels. Additionally, Franklin Electric benefits from strategic partnerships and acquisitions that expand its market reach and product offerings, further enhancing its revenue generation capabilities.

Franklin Electric Co Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q1-2025)
|
% Change Since: 5.22%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance in the Energy Systems segment and successful strategic acquisitions, which were countered by a slight decline in overall sales and operating income. Despite challenges, the company maintained resilient margins and a positive outlook for the year.
Q1-2025 Updates
Positive Updates
Energy Systems Segment Performance
Energy Systems sales increased by 8% with operating income margins improving by 250 basis points to 32.8%, primarily due to favorable geographic mix of sales and effective cost management.
Successful Acquisitions
Completed two strategic acquisitions in the first quarter: PumpEng and Barnsley, enhancing product portfolio, channel reach, and adding vertically integrated businesses in key regions.
Stable Water Systems Sales in North America
Water systems sales in the U.S. and Canada increased by 2% with groundwater pumping equipment sales up by 6% and water treatment products by 7%.
Resilient Margin Performance
Despite challenges, the gross margin improved slightly to 36%, indicating underlying operational strength.
Negative Updates
Decline in Overall Sales
Consolidated sales decreased by 1% year-over-year due to foreign currency translation and lower volumes in distribution and water system segments.
Drop in Operating Income
Operating income decreased by 8% to $44.1 million, primarily due to higher SG&A costs related to executive transition and acquisition expenses.
Challenges in Distribution Segment
Distribution sales decreased by 3% due to lower volumes and the negative impact of commodity price declines. Weather-related disruptions impacted field installations in the U.S. Midwest.
Increased SG&A Expenses
SG&A expenses rose to $119.6 million, up from $115.6 million in the previous year, mainly due to employee separation costs and acquisition-related expenses.
Company Guidance
In the recent earnings call, Franklin Electric Co., Inc. provided guidance indicating a steady outlook for 2025, with full-year sales expectations set between $2.09 billion and $2.15 billion, and adjusted GAAP EPS guidance in the range of $3.95 to $4.25. The company's consolidated sales for the first quarter of 2025 were $455.2 million, reflecting a slight year-over-year decrease of 1%, primarily attributed to foreign currency impacts and volume declines in certain segments. Despite these challenges, the Energy Systems segment showed strong performance with an 8% sales increase and an operating income margin improvement of 250 basis points. The water systems segment reported flat sales, while distribution faced a 3% decline. The company's gross margin improved by 50 basis points to 36%, although operating margins experienced a slight dip to 9.7%. The guidance also accounted for ongoing tariff uncertainties, with plans to mitigate potential impacts through strategic pricing and supply chain adjustments.

Franklin Electric Co Financial Statement Overview

Summary
Franklin Electric Co demonstrates strong profitability with consistent gross and net profit margins. The company maintains a healthy balance sheet with a conservative debt-to-equity ratio and robust asset base funded by equity. Cash flow metrics are positive, with strong cash conversion from earnings, despite some volatility in free cash flow growth.
Income Statement
78
Positive
Franklin Electric Co demonstrates strong profitability with consistent gross and net profit margins. The TTM gross profit margin is about 35.6%, and the net profit margin is 8.8%. Revenue growth has been relatively stable, with minor fluctuations, suggesting a mature market presence. EBIT and EBITDA margins are also solid, indicating good operational efficiency. However, slight revenue decline in the most recent period may suggest potential market saturation or increased competition.
Balance Sheet
82
Very Positive
The company maintains a healthy balance sheet with a debt-to-equity ratio of approximately 0.17 in TTM, reflecting conservative leverage practices. The equity ratio stands strong at around 67.4%, suggesting a robust asset base funded by equity. The return on equity is approximately 13.7% for TTM, demonstrating efficient use of equity capital to generate profits. The balance sheet reflects financial stability and low risk of solvency issues.
Cash Flow
75
Positive
Franklin Electric Co shows positive cash flow metrics, with a notable operating cash flow to net income ratio of 1.36 in TTM, indicating strong cash conversion from earnings. Free cash flow has been stable, although the growth rate shows some volatility, likely due to fluctuating capital expenditures. The free cash flow to net income ratio is robust at 1.14, suggesting effective cash generation relative to profits.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.02B2.02B2.07B2.04B1.66B1.25B
Gross Profit717.60M717.28M697.01M691.43M576.09M433.14M
EBITDA277.84M294.24M306.27M319.13M253.28M176.51M
Net Income178.31M179.61M193.27M187.33M153.86M100.46M
Balance Sheet
Total Assets1.93B1.82B1.73B1.69B1.58B1.27B
Cash, Cash Equivalents and Short-Term Investments83.99M220.54M84.96M45.79M40.54M130.79M
Total Debt224.66M191.62M156.28M264.84M236.77M126.47M
Total Liabilities627.58M550.77M517.83M623.40M626.54M422.36M
Stockholders Equity1.30B1.27B1.21B1.07B946.48M847.83M
Cash Flow
Free Cash Flow203.91M219.67M274.30M59.77M99.65M189.00M
Operating Cash Flow243.25M261.35M315.71M101.67M129.76M211.85M
Investing Cash Flow-151.53M-45.63M-74.29M-43.07M-264.81M-78.81M
Financing Cash Flow-70.28M-74.07M-192.19M-48.47M50.89M-66.58M

Franklin Electric Co Technical Analysis

Technical Analysis Sentiment
Positive
Last Price92.99
Price Trends
50DMA
87.59
Positive
100DMA
92.11
Positive
200DMA
96.96
Negative
Market Momentum
MACD
1.32
Negative
RSI
64.04
Neutral
STOCH
93.33
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FELE, the sentiment is Positive. The current price of 92.99 is above the 20-day moving average (MA) of 88.10, above the 50-day MA of 87.59, and below the 200-day MA of 96.96, indicating a neutral trend. The MACD of 1.32 indicates Negative momentum. The RSI at 64.04 is Neutral, neither overbought nor oversold. The STOCH value of 93.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FELE.

Franklin Electric Co Risk Analysis

Franklin Electric Co disclosed 19 risk factors in its most recent earnings report. Franklin Electric Co reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Franklin Electric Co Peers Comparison

Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$8.08B40.0015.24%10.78%30.05%
75
Outperform
$4.24B24.3114.11%1.14%-1.26%-4.84%
MWMWA
74
Outperform
$3.88B27.0917.68%1.08%10.96%43.44%
FLFLS
74
Outperform
$7.23B25.9314.00%1.52%4.23%20.40%
GRGRC
69
Neutral
$1.02B22.9212.06%1.91%0.92%21.96%
MIMIR
66
Neutral
$4.80B-0.68%7.25%87.34%
59
Neutral
AU$1.64B9.4411.52%3.68%6.78%6.51%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FELE
Franklin Electric Co
92.99
-0.86
-0.92%
FLS
Flowserve
55.29
9.23
20.04%
GRC
Gorman-Rupp Company
38.75
2.43
6.69%
MWA
Mueller Water Products
24.79
6.59
36.21%
SPXC
SPX
173.03
29.19
20.29%
MIR
Mirion Technologies
20.71
9.84
90.52%

Franklin Electric Co Corporate Events

Stock Buyback
Franklin Electric Increases Share Repurchase Authorization
Positive
Jun 13, 2025

On June 9, 2025, Franklin Electric’s Board of Directors approved an increase in the company’s share repurchase authorization, allowing for the repurchase of up to 1,126,635 shares of common stock. This decision followed the successful acquisition of 1,200,000 shares from the Patricia Schaefer Settlement Trust at a price of $86.78 per share. The transaction not only provided liquidity for the Schaefer estate but also demonstrated Franklin Electric’s confidence in its financial stability and future prospects.

The most recent analyst rating on (FELE) stock is a Hold with a $90.00 price target. To see the full list of analyst forecasts on Franklin Electric Co stock, see the FELE Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
Franklin Electric Co Enters New Credit Agreement
Positive
May 20, 2025

On May 14, 2025, Franklin Electric Co., Inc. entered into a Fifth Amended and Restated Credit Agreement with JPMorgan Chase Bank and Bank of America, extending the maturity date of its previous credit agreement to May 14, 2030, while maintaining a revolving commitment of $350 million. This agreement allows for an increase in aggregate revolving commitments up to $525 million and includes various financial covenants and conditions, such as a maximum leverage ratio and interest coverage ratio, which are designed to enhance the company’s financial flexibility and stability.

The most recent analyst rating on (FELE) stock is a Hold with a $90.00 price target. To see the full list of analyst forecasts on Franklin Electric Co stock, see the FELE Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy
Franklin Electric Co Appoints New Director Mark A. Carano
Positive
May 8, 2025

On May 2, 2025, Franklin Electric Co. appointed Jennifer L. Sherman as Chairperson of the Board, with her term expiring at the 2026 Annual Meeting of Shareholders. Sherman, who has been a director since 2015, is expected to further develop Franklin’s strategy. Additionally, on May 7, 2025, Mark A. Carano was appointed as a director, with his term expiring at the 2027 Annual Meeting. Carano’s extensive experience in finance and manufacturing is anticipated to contribute significantly to Franklin Electric’s growth through acquisitions, enhancing its industry positioning.

Business Operations and StrategyFinancial Disclosures
Franklin Electric Enhances Transparency with New Materials
Neutral
May 6, 2025

On May 6, 2025, Franklin Electric Co., Inc. posted quarterly presentation materials on its website for use in investor communications and conferences. This move is intended to enhance transparency and provide stakeholders with updated insights into the company’s operations and strategic positioning.

Executive/Board ChangesShareholder Meetings
Franklin Electric Co Holds 2025 Shareholder Meeting
Neutral
May 5, 2025

On April 23, 2025, Gregg C. Sengstack retired as Executive Chairperson of Franklin Electric Co., Inc., though he will remain on the Board of Directors. A Retirement and Consulting Agreement was established, providing Mr. Sengstack with financial compensation, a consulting role, and various benefits. Additionally, Franklin Electric held its 2025 annual meeting of shareholders on May 2, 2025, where key proposals, including the election of directors and ratification of Deloitte & Touche LLP as the independent auditor, were approved.

Financial DisclosuresRegulatory Filings and Compliance
Franklin Electric Co Releases Q1 2025 Earnings Presentation
Neutral
Apr 29, 2025

On April 29, 2025, Franklin Electric Co. posted its quarterly presentation materials on its website for the Q1 2025 earnings call. The presentation, which is part of a Current Report on Form 8-K, provides insights into the company’s financial performance and strategic direction, although it is not considered ‘filed’ under the Securities Exchange Act of 1934.

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.Date of analysis: Jun 24, 2025