LEGRAND (LR) AI Stock Analysis

• Market Cap: €28.66B
• Dividend Yield: 2.01%
• Average Volume (3M): 495.54K
• Price to Earnings (P/E): 24.3
• Beta (1Y): 1.08
• Revenue Growth: 7.27%
• EPS Growth: 8.92%
• Country: FR
• Employees: 33,959
• Sector: Industrials
• Sector Strength: 92
• Industry: Electrical Equipment & Parts
• EPS (TTM): 1.12
• Shares Outstanding: 262,245,730
• 10 Day Avg. Volume: 507,258
• 30 Day Avg. Volume: 495,535
• PEG Ratio: 15.20
• Price to Book (P/B): 3.75
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 21.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €113.83
• Price Target Upside: 3.86% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 76 Outperform
• Price Target: €122.00 ▲(11.31%Upside)

Legrand's stock exhibits a strong overall performance driven by robust financial health and positive technical indicators. Strong revenue growth, profitability, and cash flow provide a solid foundation, while technical analysis suggests upward momentum. Valuation metrics indicate that the stock might be slightly overvalued, which could limit upside potential. Overall, Legrand is well-positioned in its industry, but investors should monitor operational margins and leverage.

Positive Factors

Growth Strategy

Legrand starts recording organic growth from the day an acquired company is consolidated, allowing it to receive an organic growth contribution a full year before peers.

Mergers and Acquisitions

Legrand significantly scaled up its exposure in 2024 to data centers via M&A, increasing its proforma group sales by 25%.

Organic Growth

Legrand is expected to achieve 300bps of organic growth from its data center businesses alone in FY25.

Negative Factors

Earnings Guidance

Expecting weaker FY25 guidance vs the Street; organic growth gap vs Mag 3 will continue to widen.

Market Conditions

Construction momentum weak in Europe; US office might not recover until 2026.

Valuation

New estimates 4% below VA cons for FY24/25; updated PT of €86 suggesting 16% downside.

LEGRAND Business Overview & Revenue Model

Company Description

Legrand SA, together with its subsidiaries, provides electrical and digital building infrastructures worldwide. The company offers MCBs, RCDs, and din rail equipment, including residual current circuit breakers, RCBOs, add-on modules and accessories, surge protective devices, other control and signaling devices, and time and light-sensitive switches, as well as dimmers, relays, transformers, power supplies, and accessories; ACBs, MCCBs, head equipment, and busbar systems; enclosures and accessories; equipment and accessories; home network, home automation, and hotel equipment; wiring accessories; weatherproof wiring accessories and other installation equipment; lighting management, emergency lighting, access control, and safety equipment; UPS and LCS products, cable management systems, equipment, and accessories; and mosaic wiring accessories. Its products are used in hotels, offices, data centers, industrial sites, shops, hospitals, schools, and universities, as well as residential, commercial, and industrial buildings. Legrand SA was founded in 1865 and is headquartered in Limoges, France.

How the Company Makes Money

Legrand makes money primarily through the sale of electrical and digital building infrastructure solutions. Its revenue model is based on a diverse portfolio of products that serve various segments like residential, commercial, and industrial. Key revenue streams include sales of wiring devices, cable management systems, and lighting control systems. The company also benefits from strategic acquisitions that expand its product offerings and market reach. Additionally, Legrand has established significant partnerships with distributors and integrators, which help in enhancing its market penetration and driving sales volume.

LEGRAND Financial Statement Overview

Summary

Legrand demonstrates strong financial performance with consistent revenue growth and robust profitability metrics. The balance sheet is stable with manageable leverage, and the cash flow is strong, indicating efficient conversion of profits to cash. Minor improvements are needed in operational margins and debt management.

Income Statement

Legrand demonstrates strong financial performance with a steady increase in total revenue over the years, evident from a Revenue Growth Rate of 2.88% from 2024 to TTM (Trailing-Twelve-Months). The Gross Profit Margin is robust at 51.51%, reflecting effective cost management. The company also maintains a healthy Net Profit Margin of 13.31%, indicating profitability. However, EBIT and EBITDA margins of 18.98% and 24.29%, respectively, suggest room for improvement in operational efficiency.

Balance Sheet

Legrand's balance sheet is stable, with a moderate Debt-to-Equity Ratio of 0.70, showcasing manageable leverage levels. The Equity Ratio remains strong at 45.95%, indicating a solid equity base compared to total assets. Return on Equity stands at a robust 15.65%, demonstrating effective utilization of shareholder investments for returns. However, ongoing debt levels could pose a risk if not managed carefully.

Cash Flow

The cash flow position of Legrand is strong, with a Free Cash Flow to Net Income Ratio of approximately 1.13, indicating efficient conversion of profits to cash. Operating Cash Flow to Net Income Ratio is 1.32, reflecting healthy cash generation from operations. The Free Cash Flow Growth Rate of 3.75% suggests a positive trend, although fluctuations in capital expenditure highlight the need for careful investment management.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
8.90B	8.65B	8.42B	8.34B	6.99B	6.10B
	Gross Profit
4.58B	4.47B	4.40B	4.15B	3.56B	3.18B
	EBIT
1.69B	1.64B	1.59B	1.45B	1.34B	1.07B
	EBITDA
2.16B	2.11B	2.04B	1.88B	1.66B	1.39B
	Net Income Common Stockholders
1.18B	1.17B	1.15B	999.50M	904.50M	681.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.29B	2.08B	2.82B	2.40B	2.79B	2.79B
	Total Assets
16.46B	16.07B	14.84B	14.42B	14.03B	12.91B
	Total Debt
5.32B	5.09B	4.82B	4.67B	5.31B	5.39B
	Net Debt
3.03B	3.01B	2.01B	2.33B	2.53B	2.60B
	Total Liabilities
8.88B	8.53B	8.11B	7.77B	8.31B	8.00B
	Stockholders Equity
7.56B	7.53B	6.72B	6.64B	5.72B	4.90B
Cash Flow		Free Cash Flow
1.33B	1.28B	1.58B	1.03B	1.08B	1.01B
	Operating Cash Flow
1.57B	1.52B	1.84B	1.24B	1.11B	1.16B
	Investing Cash Flow
-1.55B	-1.74B	-413.30M	-463.50M	-466.90M	-850.40M
	Financing Cash Flow
-438.00M	-535.80M	-927.00M	-1.23B	-687.10M	823.70M

LEGRAND Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 109.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:LR, the sentiment is Positive. The current price of 109.6 is above the 20-day moving average (MA) of 106.55, above the 50-day MA of 98.87, and above the 200-day MA of 98.57, indicating a bullish trend. The MACD of 2.49 indicates Positive momentum. The RSI at 71.49 is Negative, neither overbought nor oversold. The STOCH value of 51.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FR:LR.

LEGRAND Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LR	76 Outperform	€28.66B	24.26	16.23%	2.01%	7.27%	8.92%
Sector *	66 Neutral	$4.50B	12.28	5.32%	248.52%	4.13%	-12.36%
0NPT		€11.62B	10.89	15.80%	3.90%	―	―
0IGF		€4.50B	15.97	15.96%	2.55%	―	―
0KBZ		€7.37B	22.01	6.11%	4.82%	―	―
COD		€50.01B	16.82	11.75%	2.19%	―	―
0R8M		€7.51B	27.36	13.56%	2.24%	―	―