LEGRAND (LR) AI Stock Analysis

• Market Cap: €32.32B
• Dividend Yield: 1.78%
• Average Volume (3M): 517.80K
• Price to Earnings (P/E): 27.4
• Beta (1Y): 1.07
• Revenue Growth: 7.27%
• EPS Growth: 8.92%
• Country: FR
• Employees: 33,959
• Sector: Industrials
• Sector Strength: 94
• Industry: Electrical Equipment & Parts
• EPS (TTM): 1.12
• Shares Outstanding: 262,245,730
• 10 Day Avg. Volume: 537,222
• 30 Day Avg. Volume: 517,797
• PEG Ratio: 17.55
• Price to Book (P/B): 4.33
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 24.60
• 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: €120.43
• Price Target Upside: -2.56% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 77 Outperform
• Price Target: €138.00 ▲(11.65%Upside)

Legrand's overall stock score is primarily driven by strong financial performance and positive technical indicators. While the company shows stable financial fundamentals and upward market momentum, the higher P/E ratio suggests valuation concerns that may limit upside potential. The lack of recent earnings call insights or significant corporate events leaves the analysis focused on the core financial and technical aspects.

Positive Factors

Data Center Expansion

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

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 benefits from higher organic growth being more valued than inorganic growth, as it instantly receives a boost to organic growth after consolidating an acquisition.

Negative Factors

Construction Sector Challenges

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

Valuation Discount

An ever-increasing cumulative growth gap to the Mag 3 in EU Electricals justifies applying a 15% valuation discount vs just 6% now.

Weak Market Momentum

JEF Low Voltage tracker suggests weaker momentum in Q4 vs consensus.

LEGRAND Business Overview & Revenue Model

Company Description

Legrand (LR) is a global specialist in electrical and digital building infrastructures, providing solutions for residential, commercial, and industrial buildings. The company operates in sectors such as electrical installations, energy distribution, and data networks, offering a range of products including switches, sockets, cable management systems, and home automation solutions. Legrand is recognized for its focus on innovation, sustainability, and design, catering to the evolving needs of its customers worldwide.

How the Company Makes Money

Legrand makes money through the design, manufacture, and sale of electrical and digital building infrastructure products. Its revenue model predominantly consists of direct sales of its diverse product portfolio, which includes wiring devices, energy distribution solutions, lighting control systems, and building automation products. The company serves a wide array of markets globally, from residential to industrial sectors, leveraging its extensive distribution network and partnerships with electrical professionals, wholesalers, and retailers. Legrand's growth is further supported by strategic acquisitions and investments in new technologies, ensuring a continuous expansion of its product offerings and market reach.

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 debt levels, and cash flows are healthy with efficient profit conversion to cash. There is room for improvement 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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.65B	8.42B	8.34B	6.99B	6.10B
Gross Profit	4.47B	4.40B	4.15B	3.56B	3.18B
EBITDA	2.11B	2.04B	1.88B	1.66B	1.39B
Net Income	1.17B	1.15B	999.50M	904.50M	681.20M
Balance Sheet
Total Assets	16.07B	14.84B	14.42B	14.03B	12.91B
Cash, Cash Equivalents and Short-Term Investments	2.08B	2.82B	2.40B	2.79B	2.79B
Total Debt	5.09B	4.82B	4.67B	5.31B	5.39B
Total Liabilities	8.53B	8.11B	7.77B	8.31B	8.00B
Stockholders Equity	7.53B	6.72B	6.64B	5.72B	4.90B
Cash Flow
Free Cash Flow	1.28B	1.58B	1.03B	1.08B	1.01B
Operating Cash Flow	1.52B	1.84B	1.24B	1.11B	1.16B
Investing Cash Flow	-1.74B	-413.30M	-463.50M	-466.90M	-850.40M
Financing Cash Flow	-535.80M	-927.00M	-1.23B	-687.10M	823.70M

LEGRAND Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 123.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 123.6 is above the 20-day moving average (MA) of 116.08, above the 50-day MA of 111.22, and above the 200-day MA of 100.93, indicating a bullish trend. The MACD of 3.91 indicates Negative momentum. The RSI at 72.80 is Negative, neither overbought nor oversold. The STOCH value of 81.84 is Negative, 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	77 Outperform	€32.32B	27.36	16.23%	1.78%	7.27%	8.92%
NEX	77 Outperform	€5.20B	18.62	15.96%	2.19%	9.70%	26.01%
RXL	75 Outperform	€7.95B	23.75	6.11%	4.47%	0.69%	-56.21%
SPIE	75 Outperform	€8.01B	29.20	13.56%	2.10%	13.69%	12.62%
FGR	73 Outperform	€11.36B	10.59	15.80%	4.02%	7.37%	3.85%
SGO	72 Outperform	€50.72B	17.92	11.75%	2.14%	-2.86%	8.16%
Sector *	65 Neutral	$11.08B	15.70	5.19%	2.15%	3.13%	-24.94%