Lincoln Electric Holdings (LECO) AI Stock Analysis

• Market Cap: $14.15B
• Dividend Yield: 1.22%
• Average Volume (3M): 391.90K
• Price to Earnings (P/E): 25.5
• Beta (1Y): 1.09
• Revenue Growth: 3.27%
• EPS Growth: 10.89%
• Country: US
• Employees: 12,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 2.65
• Shares Outstanding: 54,805,367
• 10 Day Avg. Volume: 249,928
• 30 Day Avg. Volume: 391,897
• PEG Ratio: 1.81
• Price to Book (P/B): 9.03
• Price to Sales (P/S): 3.14
• P/FCF Ratio: 24.86
• Enterprise Value/Market Cap: 1.07
• Enterprise Value/Revenue: 3.57
• Enterprise Value/Gross Profit: 9.83
• Enterprise Value/Ebitda: 18.74
• 1Y Price Target: $309.86
• Price Target Upside: 19.99% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): 10.81
• Revenue Forecast (FY): $4.52B

• Rating: 72 Outperform
• Price Target: $288.00 ▲(11.53% Upside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

LECO scores well on fundamental strength and a strong technical uptrend, supported by generally positive guidance and credible long-term targets. The main offsets are valuation (high P/E with a modest yield) and execution risk from leverage and near-term cash-flow/volume and margin pressures highlighted on the earnings call.

Positive Factors

Automation backlog & recurring consumables

A visible automation order backlog and management guidance for a 2Q 2026 ramp provide durable support for equipment recovery. Automation systems boost mix and higher-margin sales over time, while consumables tied to installed base create recurring revenue that stabilizes cash flow through cycles.

Strong cash generation & capital returns

Consistent operating cash flow (TTM ~ $661M) and healthy free cash flow (TTM ~$534M; ~81% of net income) underpin durable shareholder returns and reinvestment. Management projects >$3.7B cash from operations through 2030, supporting capex, dividends and disciplined buybacks long term.

Clear multi-year RISE targets

Concrete 2030 targets (>$6B sales, ~19% cycle operating margin, mid‑teens EPS CAGR) give a durable strategic roadmap. Clear incremental margin and ROIC goals align capital allocation and efficiency initiatives, improving accountability and the odds of sustainable margin expansion over the medium term.

Negative Factors

Moderate-to-elevated leverage

Debt near parity with equity constrains financial flexibility during downturns and limits opportunistic investments or larger buybacks. With interest guidance ($50–$55M) and cyclicality in equipment demand, elevated leverage increases recession sensitivity and reduces margin for error over the coming quarters.

Cyclical volume weakness in automation & international

Equipment and automation revenues are cyclical; meaningful recent declines compress margins and defer higher-margin system sales. Prolonged volume weakness, particularly in Europe and key end markets, keeps top-line recovery timing uncertain and may pressure margins and cash conversion over the next several quarters.

Working capital pressure and cost sensitivities

Rising working capital ties cash and reduces free-cash-flow conversion just when volumes are soft. Near-term headwinds (a ~$10M Q1 incentive cost step-up and a higher adjusted tax rate) plus metal-price volatility exposure in Harris increase earnings sensitivity and could depress margins and liquidity in the medium term.

Lincoln Electric Holdings Business Overview & Revenue Model

Company Description

Lincoln Electric Holdings, Inc., through its subsidiaries, designs, develops, manufactures, and sells welding, cutting, and brazing products worldwide. The company operates through three segments: Americas Welding, International Welding, and The Harris Products Group. It offers welding products, including arc welding power sources, plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes and welding accessories, and specialty welding consumables and fabrication products. The company's product offering also includes computer numeric controlled plasma and oxy-fuel cutting systems, and regulators and torches used in oxy-fuel welding, cutting, and brazing; and consumables used in the brazing and soldering alloys market. In addition, it is involved in the retail business in the United States. Further, the company manufactures copper and aluminum headers, distributor assemblies, and manifolds for the heating, ventilation, and air conditioning sector in the United States and Mexico. The company serves general fabrication, energy and process, automotive and transportation, and construction and infrastructure industries, as well as heavy fabrication, ship building, and maintenance and repair markets. It sells its products directly to users of welding products, as well as through industrial distributors, retailers, and agents. The company was founded in 1895 and is headquartered in Cleveland, Ohio.

How the Company Makes Money

Lincoln Electric primarily makes money by selling welding-related products and solutions to industrial customers. Key revenue streams include: (1) Welding equipment sales: revenue from power sources, wire feeders, torches, cutting equipment, and other hardware used in welding and cutting operations; (2) Consumables sales: recurring revenue from welding consumables such as electrodes, solid and flux-cored wires, and fluxes that customers must replenish as they weld; (3) Automation and system solutions: revenue from integrated automated welding cells and systems (including robotic and mechanized solutions), system integration, and related components; (4) Software and services: revenue from welding/fabrication software, maintenance and support, training, and other services tied to installed equipment and automation systems. Earnings are influenced by industrial production and capital spending cycles, as equipment and automation demand is typically more cyclical while consumables tend to be more recurring. Specific details on significant partnerships are not available from the information provided here and are therefore null.

Lincoln Electric Holdings Financial Statement Overview

Summary

Fundamentals are solid: very strong TTM revenue growth and healthy profitability (about 36% gross margin and ~12% net margin), plus strong ROE. Offsetting factors are moderate-to-elevated leverage (debt roughly in line with equity) and weaker/volatile recent free-cash-flow growth and cash-flow coverage, which reduce consistency.

Income Statement

TTM (Trailing-Twelve-Months) revenue is up sharply (+135.7%), and profitability remains solid with ~36% gross margin and ~12.3% net margin. Net income has improved versus 2024, supporting a healthy earnings profile. Offsetting this, operating profitability has shown some pressure versus prior periods (EBITDA margin ~18.4% in TTM vs ~20.0% in 2024), suggesting mix/cost headwinds despite the strong top-line growth.

Balance Sheet

Leverage is moderate-to-elevated with debt roughly in line with equity (debt-to-equity ~0.98 in TTM, ~0.99 in 2024), which limits flexibility versus more conservatively financed peers. Positively, equity has grown and returns on equity are strong (TTM ~37%), indicating effective capital use. The main risk is that debt levels have risen over time, keeping balance-sheet risk from scoring higher.

Cash Flow

Cash generation is solid: TTM operating cash flow (~$661M) and free cash flow (~$534M) are strong in absolute terms, and free cash flow is a healthy ~81% of net income, indicating good earnings quality. However, free cash flow growth is negative in TTM (-224.9%) and slightly down in 2024, pointing to volatility in conversion and/or higher investment needs. Operating cash flow coverage is also only moderate (TTM ~0.69), so cash flow strength is good but not consistently improving.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	4.23B	4.01B	4.19B	3.76B	3.23B
Gross Profit	1.54B	1.48B	1.48B	1.28B	1.07B
EBITDA	825.56M	800.52M	789.48M	708.11M	675.23M
Net Income	520.53M	466.11M	545.25M	472.22M	276.58M
Balance Sheet
Total Assets	3.78B	3.52B	3.38B	3.18B	2.59B
Cash, Cash Equivalents and Short-Term Investments	308.79M	377.26M	393.79M	197.15M	192.96M
Total Debt	1.29B	1.32B	1.16B	1.25B	819.00M
Total Liabilities	2.31B	2.19B	2.07B	2.15B	1.73B
Stockholders Equity	1.47B	1.33B	1.31B	1.03B	864.10M
Cash Flow
Free Cash Flow	534.20M	482.37M	576.55M	311.50M	302.53M
Operating Cash Flow	661.17M	598.98M	667.54M	383.39M	365.06M
Investing Cash Flow	-257.33M	-361.23M	-74.73M	-504.69M	-205.36M
Financing Cash Flow	-461.89M	-244.64M	-412.39M	133.72M	-221.94M

Lincoln Electric Holdings Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 258.23
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LECO, the sentiment is Neutral. The current price of 258.23 is below the 20-day moving average (MA) of 274.17, below the 50-day MA of 271.25, and above the 200-day MA of 240.89, indicating a neutral trend. The MACD of -4.82 indicates Positive momentum. The RSI at 36.27 is Neutral, neither overbought nor oversold. The STOCH value of 17.06 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LECO.

Lincoln Electric Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RBC	79 Outperform	$17.32B	53.36	8.53%	―	8.27%	19.06%
SNA	78 Outperform	$18.79B	17.98	17.70%	2.52%	0.24%	-1.85%
LECO	72 Outperform	$14.15B	25.51	37.15%	1.22%	3.27%	10.89%
TKR	72 Outperform	$6.83B	20.35	9.35%	1.61%	-1.01%	-12.13%
KMT	65 Neutral	$2.75B	16.15	8.61%	2.74%	-2.63%	-4.46%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
SWK	62 Neutral	$10.80B	28.82	4.47%	4.42%	-1.40%	―