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LEGRAND SA (FR:LR)
:LR

LEGRAND (LR) AI Stock Analysis

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FR

LEGRAND

(LSE:LR)

Rating:76Outperform
Price Target:
€122.00
▲(11.72%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 (LR) vs. iShares MSCI France ETF (EWQ)

LEGRAND Business Overview & Revenue Model

Company DescriptionLegrand (LR) is a global leader in electrical and digital building infrastructures. The company operates across multiple sectors, including energy distribution, lighting management, and data networks. Legrand's core products and services encompass a wide range of solutions such as switches, sockets, building systems, and cable management, catering to residential, commercial, and industrial markets worldwide.
How the Company Makes MoneyLegrand 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
85
Very Positive
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
78
Positive
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
80
Positive
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
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
8.90B8.65B8.42B8.34B6.99B6.10B
Gross Profit
4.58B4.47B4.40B4.15B3.56B3.18B
EBIT
1.69B1.64B1.59B1.45B1.34B1.07B
EBITDA
2.16B2.11B2.04B1.88B1.66B1.39B
Net Income Common Stockholders
1.18B1.17B1.15B999.50M904.50M681.20M
Balance SheetCash, Cash Equivalents and Short-Term Investments
2.29B2.08B2.82B2.40B2.79B2.79B
Total Assets
16.46B16.07B14.84B14.42B14.03B12.91B
Total Debt
5.32B5.09B4.82B4.67B5.31B5.39B
Net Debt
3.03B3.01B2.01B2.33B2.53B2.60B
Total Liabilities
8.88B8.53B8.11B7.77B8.31B8.00B
Stockholders Equity
7.56B7.53B6.72B6.64B5.72B4.90B
Cash FlowFree Cash Flow
1.33B1.28B1.58B1.03B1.08B1.01B
Operating Cash Flow
1.57B1.52B1.84B1.24B1.11B1.16B
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-687.10M823.70M

LEGRAND Technical Analysis

Technical Analysis Sentiment
Positive
Last Price109.20
Price Trends
50DMA
99.04
Positive
100DMA
99.84
Positive
200DMA
98.63
Positive
Market Momentum
MACD
2.47
Positive
RSI
69.20
Neutral
STOCH
57.85
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 109.2 is above the 20-day moving average (MA) of 106.76, above the 50-day MA of 99.04, and above the 200-day MA of 98.63, indicating a bullish trend. The MACD of 2.47 indicates Positive momentum. The RSI at 69.20 is Neutral, neither overbought nor oversold. The STOCH value of 57.85 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

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
FRNEX
79
Outperform
€4.47B16.0215.96%2.55%9.70%26.01%
FRFGR
77
Outperform
€11.62B10.8415.80%3.91%7.37%3.85%
FRLR
76
Outperform
€28.66B24.2616.23%2.01%7.27%8.92%
75
Outperform
€7.51B27.3613.56%2.24%13.69%12.62%
FRSGO
74
Outperform
€50.01B17.7911.75%2.19%-2.86%8.16%
FRRXL
73
Outperform
€7.37B22.006.11%4.82%0.69%-56.21%
66
Neutral
$4.50B12.295.40%248.66%4.13%-12.33%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FR:LR
LEGRAND
109.20
14.23
14.99%
FR:FGR
Eiffage
119.90
32.41
37.04%
FR:SPIE
SPIE SA
44.58
9.72
27.87%
FR:SGO
Compagnie de Saint Gobain
99.20
24.42
32.66%
FR:RXL
Rexel SA
25.27
0.13
0.53%
FR:NEX
Nexans
102.40
-2.44
-2.33%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.