LEGRAND (LR) AI Stock Analysis

• Market Cap: €34.36B
• Dividend Yield: 1.69%
• Average Volume (3M): 531.57K
• Price to Earnings (P/E): 28.3
• Beta (1Y): 1.02
• Revenue Growth: 10.57%
• EPS Growth: 13.41%
• Country: FR
• Employees: 33,959
• Sector: Industrials
• Sector Strength: 84
• Industry: Electrical Equipment & Parts
• EPS (TTM): 1.37
• Shares Outstanding: 262,245,730
• 10 Day Avg. Volume: 637,156
• 30 Day Avg. Volume: 531,565
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: €133.13
• Price Target Upside: 2.02% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

• Rating: 73 Outperform
• Price Target: €144.00 ▲(10.34% Upside)

Legrand's strong financial performance and positive technical indicators are the primary drivers of its stock score. However, the high valuation and potential overbought conditions temper the overall outlook. Investors should monitor leverage and cash flow trends closely.

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 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 generates revenue through multiple streams, primarily by selling its extensive range of electrical and digital infrastructure products to distributors, wholesalers, and directly to end-users in various sectors. Key revenue streams include the sale of wiring devices, lighting management systems, and smart home solutions. The company benefits from a strong presence in emerging markets and strategic partnerships with construction and technology firms, which enable it to leverage new business opportunities. Additionally, LEGRAND invests in research and development to innovate and expand its product offerings, thereby driving sales growth and maintaining a competitive edge in the evolving market landscape.

LEGRAND Financial Statement Overview

Summary

Legrand exhibits strong financial performance with consistent revenue growth and robust profitability margins. The balance sheet is stable, though increasing leverage warrants attention. Cash flow generation is solid, but recent declines in free cash flow growth highlight potential challenges.

Income Statement

Legrand demonstrates strong financial performance with consistent revenue growth, achieving a 3.53% increase in TTM. The company maintains healthy profitability margins, with a gross profit margin of 51.28% and a net profit margin of 13.21%. EBIT and EBITDA margins are robust at 19.76% and 24.11%, respectively, indicating efficient operations. However, the slight decline in gross profit margin over the years suggests potential cost pressures.

Balance Sheet

Legrand's balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.86, indicating moderate leverage. The return on equity is strong at 16.84%, showcasing effective use of equity to generate profits. The equity ratio stands at 42.17%, reflecting a solid equity base relative to total assets. However, the increase in total debt over the years could pose a risk if not managed carefully.

Cash Flow

The cash flow analysis reveals a mixed picture. While the operating cash flow to net income ratio is healthy at 0.56, indicating good cash generation relative to net income, the free cash flow growth rate has declined by 69.8% in TTM, which could impact future investments. The free cash flow to net income ratio remains strong at 0.85, suggesting efficient cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.21B	8.65B	8.42B	8.34B	6.99B	6.10B
Gross Profit	4.72B	4.47B	4.40B	4.15B	3.56B	3.18B
EBITDA	2.22B	2.11B	2.04B	1.88B	1.66B	1.39B
Net Income	1.22B	1.17B	1.15B	999.50M	904.50M	681.20M
Balance Sheet
Total Assets	16.56B	16.07B	14.84B	14.42B	14.03B	12.91B
Cash, Cash Equivalents and Short-Term Investments	2.69B	2.08B	2.82B	2.40B	2.79B	2.79B
Total Debt	5.99B	5.09B	4.82B	4.67B	5.31B	5.39B
Total Liabilities	9.56B	8.53B	8.11B	7.77B	8.31B	8.00B
Stockholders Equity	6.98B	7.53B	6.72B	6.64B	5.72B	4.90B
Cash Flow
Free Cash Flow	1.32B	1.28B	1.58B	1.03B	942.20M	1.13B
Operating Cash Flow	1.55B	1.52B	1.84B	1.24B	1.11B	1.16B
Investing Cash Flow	-679.70M	-1.74B	-413.30M	-463.50M	-466.90M	-850.40M
Financing Cash Flow	-261.70M	-535.80M	-927.00M	-1.23B	-687.10M	823.70M

LEGRAND Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 130.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• 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 130.5 is above the 20-day moving average (MA) of 127.28, above the 50-day MA of 117.47, and above the 200-day MA of 102.77, indicating a bullish trend. The MACD of 4.04 indicates Positive momentum. The RSI at 68.74 is Neutral, neither overbought nor oversold. The STOCH value of 56.13 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	73 Outperform	€34.36B	28.30	17.67%	1.69%	10.57%	13.41%
Sector *	62 Neutral	C$7.21B	-5.53	-4.20%	2.31%	13.66%	-29.71%
0NPT	―	€11.90B	11.09	15.80%	―	―	―
0IGF	―	€6.01B	12.53	25.83%	―	―	―
0KBZ	―	€7.84B	31.61	4.63%	―	―	―
COD	―	€48.60B	17.18	11.84%	2.26%	―	―
0R8M	―	€9.08B	44.72	10.66%	―	―	―