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Franklin Electric Co. (FELE)
NASDAQ:FELE
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Franklin Electric Co
(NASDAQ:FELE)
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Rating:71Outperform
Price Target:
$104.00
▲(7.26% Upside)
Franklin Electric Co's overall stock score reflects strong financial health and positive earnings call highlights, including sales growth and improved margins. However, high valuation and technical indicators suggest caution. The company's strategic investments and innovation are promising, but challenges such as declining profit margins and ForEx impacts need to be addressed.
Positive Factors
Revenue Growth
The consistent revenue growth, particularly in Water and Energy Systems, indicates strong market demand and effective sales strategies, supporting long-term business expansion.
Innovation and Expansion
The new factory and product innovations like the pressure boosting platform demonstrate Franklin Electric's commitment to growth and competitive positioning.
Financial Health
A low debt-to-equity ratio indicates a strong financial position, providing stability and flexibility for future investments and growth initiatives.
Negative Factors
Declining Profit Margins
Decreasing profit margins suggest rising costs or inefficiencies, which could hinder profitability and cash flow if not addressed.
Foreign Exchange Challenges
Foreign exchange volatility, particularly in hyperinflationary regions, poses a risk to earnings stability and financial performance.
Pension Plan Termination Impact
The pension plan termination incurs significant costs, affecting short-term earnings and potentially straining financial resources.
Franklin Electric Co (FELE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.25B
Dividend Yield1.11%
Average Volume (3M)234.70K
Price to Earnings (P/E)31.2
Beta (1Y)0.88
Revenue Growth5.06%
EPS Growth-22.73%
CountryUS
Employees6,300
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)1.30
Shares Outstanding44,510,380
10 Day Avg. Volume183,118
30 Day Avg. Volume234,699
Financial Highlights & Ratios
PEG Ratio-4.14
Price to Book (P/B)3.53
Price to Sales (P/S)2.21
P/FCF Ratio20.36
Enterprise Value/Market Cap1.05
Enterprise Value/Revenue2.11
Enterprise Value/Gross Profit5.95
Enterprise Value/Ebitda17.36
Forecast
1Y Price Target
$112.00Price Target Upside15.51% Upside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)4.16
Revenue Forecast (FY)$2.14B
Franklin Electric Co Business Overview & Revenue Model
Company DescriptionFranklin Electric Co (FELE) is a global leader in the manufacturing and distribution of products and systems focused on the movement and management of water and fuel. The company operates primarily in two main sectors: Water Systems and Fueling Systems. It offers a wide range of core products including submersible pumps, water well pumps, fuel pumps, and related components and systems. FELE serves various markets, including residential, commercial, agricultural, and industrial applications, providing solutions that ensure efficient water and fuel management.
How the Company Makes MoneyFranklin Electric generates revenue primarily through the sale of its water and fueling systems products. The company has multiple key revenue streams, including direct sales of pumps, motors, controls, and accessories for water and fuel applications. Additionally, Franklin Electric benefits from aftermarket sales, which include replacement parts and services for its installed systems. The company has established significant partnerships with distributors, contractors, and OEMs that enhance its market reach and sales potential. Furthermore, developments in technology and sustainable practices in water management and fuel systems play a vital role in driving demand for Franklin Electric's innovative solutions, contributing to its overall earnings.
Franklin Electric Co Earnings Call Summary
Earnings Call Date:Jul 29, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Feb 17, 2026
Earnings Call Sentiment Positive
The earnings call presented a positive outlook with strong sales growth and effective margin protection through strategic pricing actions. Despite challenges such as gross margin decline and foreign currency impacts, the company's strategic leadership appointments and successful execution across segments reflect a robust performance. The focus on innovation and strategic acquisitions positions Franklin Electric well for future growth.Q2-2025 Updates
Positive Updates
Record Sales and Operating Income
Franklin Electric set new high marks for revenue, income, and earnings per share, with a consolidated sales growth of 8% across all segments. The Water and Distribution segment delivered a sales record, and the Energy segment achieved record operating income.
Successful Pricing Actions and Margin Protection
Pricing actions were effectively implemented to protect margins amidst market volatility, with operating income margin reaching 15%, up from 14.6% year-over-year.
Strong Performance in Energy Segment
The Energy segment reported a 6% sales growth, driven by favorable volume and price increases, with operating income margins improving by 200 basis points.
Distribution Segment Margin Improvement
The Distribution segment achieved a 300 basis point improvement in operating margins, driven by strong operational execution and improved pricing environment.
Strategic Leadership Appointments
Jennifer Wolfenbarger was welcomed as the new CFO, bringing extensive financial leadership experience, and Daniela Williams as the new Chief Human Resources Officer, enhancing the company’s strategic capabilities.
Negative Updates
Gross Margin Decline
Consolidated gross profit as a percentage of net sales decreased by 70 basis points compared to the prior year.
Impact of Recent Acquisitions on Margins
Water Systems segment experienced a drag on margins due to sales mix and acquisition-related costs.
Foreign Currency Translation Challenges
Sales were negatively impacted by foreign currency translation, primarily due to the Brazilian real.
Softness in Existing Home Sales and Housing Starts
There was weakness in the housing market, with existing home sales and housing starts remaining soft, impacting demand.
Company Guidance
During Franklin Electric's second quarter 2025 earnings call, the company reported strong consolidated sales growth of 8%, with sales reaching $587.4 million, driven by higher volume and favorable pricing across all segments. The Water Systems segment saw an 8% increase in sales year-over-year, while Distribution and Energy segments reported sales growth of 5% and 6%, respectively. The company's operating income increased by 11% to $88.1 million, resulting in an improved operating income margin of 15%. Despite a slight decrease in gross margin by 70 basis points to 36.1%, Franklin Electric maintained its full-year sales expectations between $2.09 billion and $2.15 billion and earnings per share guidance ranging from $3.95 to $4.25. Additionally, Franklin Electric's strategic pricing actions and cost management efforts effectively mitigated the adverse effects of tariffs and foreign currency translation, helping to protect margins during market volatility.Franklin Electric Co Financial Statement Overview
Summary
Franklin Electric Co demonstrates solid financial health with stable revenue growth and effective cost management. The balance sheet reflects a strong equity position and conservative leverage. However, declining profit margins and free cash flow growth suggest potential challenges in maintaining profitability and cash generation. Overall, the company is well-positioned but should focus on improving operational efficiency and cash flow management.Income Statement
Franklin Electric Co has shown consistent revenue growth over the years, with a TTM revenue growth rate of 2.44%. The gross profit margin remains stable at around 35%, indicating effective cost management. However, the net profit margin has decreased to 6.71% in the TTM, down from 8.89% in 2024, suggesting increased expenses or lower efficiency. The EBIT and EBITDA margins have also declined, indicating potential challenges in operational efficiency.75
Positive
Balance Sheet
The company's debt-to-equity ratio is low at 0.20, reflecting a conservative leverage strategy. The return on equity (ROE) has decreased to 10.98% in the TTM from 14.19% in 2024, which may indicate reduced profitability or efficiency in using equity. The equity ratio remains strong, suggesting a solid financial position with a good proportion of equity financing.80
Positive
Cash Flow
Operating cash flow remains robust, with a TTM operating cash flow to net income ratio of 0.61. However, free cash flow has declined by 7.05% in the TTM, which could impact future investments or debt repayments. The free cash flow to net income ratio is strong at 0.83, indicating good cash generation relative to net income.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.11B | 2.02B | 2.07B | 2.04B | 1.66B | 1.25B |
| Gross Profit | 748.67M | 717.28M | 697.01M | 691.43M | 576.09M | 433.14M |
| EBITDA | 256.69M | 294.24M | 306.27M | 297.13M | 239.47M | 164.81M |
| Net Income | 141.50M | 180.31M | 193.27M | 187.33M | 153.86M | 100.46M |
Balance Sheet | ||||||
| Total Assets | 2.00B | 1.82B | 1.73B | 1.69B | 1.58B | 1.27B |
| Cash, Cash Equivalents and Short-Term Investments | 102.93M | 220.54M | 84.96M | 45.79M | 40.54M | 130.79M |
| Total Debt | 270.72M | 191.62M | 156.28M | 264.84M | 236.77M | 126.47M |
| Total Liabilities | 675.97M | 550.77M | 517.83M | 623.40M | 626.54M | 422.36M |
| Stockholders Equity | 1.32B | 1.27B | 1.21B | 1.07B | 946.48M | 847.83M |
Cash Flow | ||||||
| Free Cash Flow | 202.35M | 219.67M | 274.30M | 59.77M | 99.65M | 189.00M |
| Operating Cash Flow | 244.95M | 261.35M | 315.71M | 101.67M | 129.76M | 211.85M |
| Investing Cash Flow | -153.44M | -45.63M | -74.29M | -43.07M | -264.81M | -78.81M |
| Financing Cash Flow | -86.24M | -74.07M | -192.19M | -48.47M | 50.89M | -66.58M |
Franklin Electric Co Technical Analysis
Positive
96.96
Price Trends
94.71
Positive
94.95
Positive
92.59
Positive
Market Momentum
0.16
Negative
58.89
Neutral
45.19
Neutral
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 96.96 is above the 20-day moving average (MA) of 93.75, above the 50-day MA of 94.71, and above the 200-day MA of 92.59, indicating a bullish trend. The MACD of 0.16 indicates Negative momentum. The RSI at 58.89 is Neutral, neither overbought nor oversold. The STOCH value of 45.19 is Neutral, 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 20 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $3.86B | 20.26 | 21.40% | 1.09% | 8.75% | 64.82% | |
77 Outperform | $9.17B | 28.37 | 17.81% | 0.72% | 4.18% | 16.05% | |
76 Outperform | $1.29B | 25.64 | 13.01% | 1.51% | 3.19% | 31.51% | |
71 Outperform | $4.25B | 31.19 | 10.89% | 1.11% | 5.06% | -22.73% | |
69 Neutral | $10.18B | 39.66 | 3.89% | 0.93% | -4.99% | 22.16% | |
66 Neutral | $6.40B | 223.17 | 1.58% | ― | 7.81% | ― | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
FELE
Franklin Electric Co
96.05
-7.88
-7.58%
GRC
Gorman-Rupp Company
49.58
9.76
24.51%
MWA
Mueller Water Products
24.99
0.95
3.95%
RRX
Regal Rexnord
150.16
-17.03
-10.19%
WTS
Watts Water Technologies
279.11
62.91
29.10%
MIR
Mirion Technologies
24.67
6.64
36.83%
Franklin Electric Co Corporate Events
Business Operations and Strategy
Franklin Electric Co Engages at Baird Industrial Conference
Neutral
Nov 13, 2025
On November 13, 2025, Franklin Electric Co., Inc. participated in the 2025 Baird Global Industrial Conference and made its presentation materials available on its website. This event reflects the company’s engagement with the industrial sector and its commitment to transparency with investors.
Business Operations and StrategyFinancial Disclosures
Franklin Electric Releases Q3 2025 Presentation Materials
Neutral
Oct 28, 2025
On October 28, 2025, Franklin Electric Co., Inc. released its quarterly presentation materials for Q3 2025 on its website. These materials are intended for use in the company’s upcoming earnings call, providing insights into its financial performance and strategic direction.
Private Placements and FinancingBusiness Operations and Strategy
Franklin Electric Co Issues $125M in Senior Notes
Positive
Oct 2, 2025
On September 26, 2025, Franklin Electric Co. issued $125 million in Senior Notes due in 2032 under Private Shelf Agreements to refinance existing debt and finance working capital. This strategic financial move is expected to strengthen the company’s operational flexibility and market positioning.
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.