LEGRAND (LR) AI Stock Analysis

• Market Cap: €29.04B
• Dividend Yield: 1.94%
• Average Volume (3M): 502.95K
• Price to Earnings (P/E): 24.6
• Beta (1Y): 1.08
• Revenue Growth: 7.27%
• EPS Growth: 8.92%
• Country: FR
• Employees: 33,959
• Sector: Industrials
• Sector Strength: 87
• Industry: Electrical Equipment & Parts
• EPS (TTM): 1.12
• Shares Outstanding: 262,245,730
• 10 Day Avg. Volume: 555,638
• 30 Day Avg. Volume: 502,951
• PEG Ratio: 1.88
• Price to Book (P/B): 3.01
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 19.36
• 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: €117.86
• Price Target Upside: 5.04% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 76 Outperform
• 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 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
EBITDA	2.16B	2.11B	2.04B	1.88B	1.66B	1.39B
Net Income	1.18B	1.17B	1.15B	999.50M	904.50M	681.20M
Balance Sheet
Total Assets	16.46B	16.07B	14.84B	14.42B	14.03B	12.91B
Cash, Cash Equivalents and Short-Term Investments	2.29B	2.08B	2.82B	2.40B	2.79B	2.79B
Total Debt	5.32B	5.09B	4.82B	4.67B	5.31B	5.39B
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: 112.20
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LR	76 Outperform	€29.04B	24.58	16.23%	1.94%	7.27%	8.92%
Sector *	65 Neutral	$10.65B	15.52	5.51%	1.92%	2.72%	-26.34%
0NPT		€11.52B	10.78	15.80%	3.41%	―	―
0IGF		€4.71B	16.85	15.96%	2.02%	―	―
0KBZ		€7.68B	22.86	6.11%	4.02%	―	―
COD		€48.38B	17.24	11.75%	1.95%	―	―
0R8M		€7.94B	28.93	13.56%	2.12%	―	―