Lincoln Electric Holdings (LECO) AI Stock Analysis

• Market Cap: $13.29B
• Dividend Yield: 1.24%
• Average Volume (3M): 334.99K
• Price to Earnings (P/E): 27.1
• Beta (1Y): 1.12
• Revenue Growth: 0.24%
• EPS Growth: 0.05%
• Country: US
• Employees: 12,000
• Sector: Industrials
• Sector Strength: 83
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 2.60
• Shares Outstanding: 55,186,253
• 10 Day Avg. Volume: 284,186
• 30 Day Avg. Volume: 334,991
• 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: 0.95
• Enterprise Value/Revenue: 3.08
• Enterprise Value/Gross Profit: 8.44
• Enterprise Value/Ebitda: 16.62
• 1Y Price Target: $242.80
• Price Target Upside: 1.97% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 78 Outperform
• Price Target: $271.00 ▲(13.81% Upside)

Lincoln Electric Holdings demonstrates strong financial performance and positive technical indicators, driving the overall score. The company's strategic acquisitions and robust sales growth contribute positively, though challenges in certain segments and valuation concerns slightly temper the outlook.

Positive Factors

Cost Management

The company is taking action, with both temporary and structural cost cuts which should limit decremental margins and overall EPS compression.

Restructuring Strategy

LECO is applying a playbook seen in prior downturns, with volume dependent temporary savings but also acceleration of structural restructuring, setting up the company well for a more normalized environment.

Negative Factors

End Market Softness

Given persistent softness across end markets (particularly Auto, Heavy Industries, and Europe), management remains cautious through 1Q25.

Market Performance

LECO is experiencing a broad based downturn with volume compression across all key served verticals; the pressure from Auto and Off Highway is set to extend through 1H25.

Product Category Decline

Management noted a slower 3Q across all categories, with both Consumables down LSD-MSD%, Equipment down HSD% and Automation down LDD%.

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 generates revenue primarily through the sale of welding products and related services. Its key revenue streams include the manufacturing and distribution of welding equipment, consumables, and automation solutions. The company benefits from a diverse customer base across multiple industries, which helps mitigate risks associated with market fluctuations. Significant partnerships with industrial manufacturers and distributors enhance Lincoln Electric's market presence and drive sales. Additionally, the company's focus on innovation and development of advanced welding technologies allows it to maintain a competitive edge, further contributing to its earnings.

Lincoln Electric Holdings Financial Statement Overview

Summary

Lincoln Electric Holdings presents a solid financial position with strong profitability, efficient cash management, and a balanced capital structure. The company demonstrates consistent revenue and profit growth, robust margins, and effective cash conversion, positioning it well within the industry.

Income Statement

Lincoln Electric Holdings demonstrates strong profitability with a TTM gross profit margin of 36.39% and a net profit margin of 12.27%, indicating efficient cost management and robust bottom-line performance. The revenue growth rate from 2024 to TTM is 2.25%, showing steady but moderate growth. EBIT and EBITDA margins are healthy at 16.58% and 17.87%, respectively, reflecting solid operational efficiency.

Balance Sheet

The company's balance sheet shows moderate leverage, with a debt-to-equity ratio of 0.99. The return on equity (ROE) of 36.45% is impressive, highlighting strong returns for shareholders. The equity ratio of 37.02% suggests a balanced capital structure, though there is room for improvement in increasing equity relative to total assets.

Cash Flow

Lincoln Electric Holdings displays strong cash flow performance, with a free cash flow growth rate of 4.67% from 2024 to TTM. The operating cash flow to net income ratio is 1.24, indicating commendable cash generation relative to net income. The free cash flow to net income ratio of 1.00 signifies effective conversion of profits into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.10B	4.01B	4.19B	3.76B	3.23B	2.66B
Gross Profit	1.50B	1.47B	1.48B	1.28B	1.07B	871.34M
EBITDA	758.78M	736.70M	824.67M	700.14M	428.36M	368.49M
Net Income	502.87M	466.11M	545.25M	472.22M	276.58M	206.12M
Balance Sheet
Total Assets	3.73B	3.52B	3.38B	3.18B	2.59B	2.31B
Cash, Cash Equivalents and Short-Term Investments	299.48M	377.26M	393.79M	197.15M	192.96M	257.28M
Total Debt	1.36B	1.32B	1.16B	1.25B	819.00M	763.68M
Total Liabilities	2.35B	2.19B	2.07B	2.15B	1.73B	1.52B
Stockholders Equity	1.38B	1.33B	1.31B	1.03B	863.91M	790.25M
Cash Flow
Free Cash Flow	504.92M	482.37M	576.55M	311.50M	302.53M	292.16M
Operating Cash Flow	624.52M	598.98M	667.54M	383.39M	365.06M	351.36M
Investing Cash Flow	-239.96M	-361.23M	-74.73M	-504.69M	-205.36M	-49.21M
Financing Cash Flow	-343.90M	-244.64M	-412.39M	133.72M	-221.94M	-246.14M

Lincoln Electric Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 238.12
• 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 LECO, the sentiment is Positive. The current price of 238.12 is above the 20-day moving average (MA) of 238.06, above the 50-day MA of 223.15, and above the 200-day MA of 201.74, indicating a bullish trend. The MACD of 4.83 indicates Positive momentum. The RSI at 56.20 is Neutral, neither overbought nor oversold. The STOCH value of 47.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LECO.

Lincoln Electric Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RBC	78 Outperform	$12.56B	49.40	8.56%	―	5.48%	16.88%
SNA	78 Outperform	$16.94B	17.31	18.18%	2.65%	-0.76%	-2.62%
LECO	78 Outperform	$13.29B	27.08	37.35%	1.24%	0.24%	0.05%
TKR	75 Outperform	$5.35B	17.49	10.52%	1.82%	-2.01%	-9.95%
SWK	69 Neutral	$11.80B	24.17	5.38%	4.44%	-2.71%	―
Sector *	63 Neutral	$10.76B	16.24	6.80%	2.07%	2.60%	-16.34%
KMT	60 Neutral	$1.60B	17.62	7.35%	3.85%	-3.91%	-12.49%

Lincoln Electric Holdings Corporate Events

Lincoln Electric Announces Board Changes and New Appointment

On February 19, 2025, Lincoln Electric Holdings announced that Kellye I. Walker would resign from its Board of Directors, effective at the 2025 annual meeting of shareholders. Her departure is not due to any disagreements with the company. Concurrently, the board expanded from eleven to twelve members, electing N. Joy Falotico, former President of The Lincoln Motor Company, as a new independent director. Falotico’s appointment is expected to enhance the board with her global leadership experience and financial expertise, supporting Lincoln Electric’s strategic initiatives for long-term growth. Additionally, Michele R. Kuhrt, Executive Vice President and Chief Transformation Officer, announced her retirement effective August 31, 2025, and will assist with the transition until then.