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LEGRAND (FR:LR)
:LR

LEGRAND (LR) AI Stock Analysis

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FR

LEGRAND

(LSE:LR)

Rating:76Outperform
Price Target:
€122.00
▲(8.73%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
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 (LR) vs. iShares MSCI France ETF (EWQ)

LEGRAND Business Overview & Revenue Model

Company DescriptionLegrand 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 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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue8.90B8.65B8.42B8.34B6.99B6.10B
Gross Profit4.58B4.47B4.40B4.15B3.56B3.18B
EBITDA2.16B2.11B2.04B1.88B1.66B1.39B
Net Income1.18B1.17B1.15B999.50M904.50M681.20M
Balance Sheet
Total Assets16.46B16.07B14.84B14.42B14.03B12.91B
Cash, Cash Equivalents and Short-Term Investments2.29B2.08B2.82B2.40B2.79B2.79B
Total Debt5.32B5.09B4.82B4.67B5.31B5.39B
Total Liabilities8.88B8.53B8.11B7.77B8.31B8.00B
Stockholders Equity7.56B7.53B6.72B6.64B5.72B4.90B
Cash Flow
Free Cash Flow1.33B1.28B1.58B1.03B1.08B1.01B
Operating Cash Flow1.57B1.52B1.84B1.24B1.11B1.16B
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 Price112.20
Price Trends
50DMA
105.36
Positive
100DMA
102.27
Positive
200DMA
99.67
Positive
Market Momentum
MACD
1.71
Negative
RSI
60.78
Neutral
STOCH
68.15
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 112.2 is above the 20-day moving average (MA) of 109.98, above the 50-day MA of 105.36, and above the 200-day MA of 99.67, indicating a bullish trend. The MACD of 1.71 indicates Negative momentum. The RSI at 60.78 is Neutral, neither overbought nor oversold. The STOCH value of 68.15 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 (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
FRLR
76
Outperform
€29.04B24.5816.23%1.94%7.27%8.92%
65
Neutral
$10.65B15.525.51%1.92%2.72%-26.34%
€11.52B10.7815.80%3.41%
€4.71B16.8515.96%2.02%
€7.68B22.866.11%4.02%
GBCOD
€48.38B17.2411.75%1.95%
€7.94B28.9313.56%2.12%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FR:LR
LEGRAND
112.20
19.70
21.30%
GB:0NPT
Eiffage
117.90
30.57
35.01%
GB:0IGF
Nexans
109.24
3.46
3.27%
GB:0KBZ
Rexel SA
26.15
2.79
11.94%
GB:COD
Compagnie de Saint Gobain
93.60
18.91
25.32%
GB:0R8M
SPIE SA
46.80
11.74
33.49%
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.Date of analysis: May 17, 2025