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Lincoln Electric Holdings (LECO)
NASDAQ:LECO
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Lincoln Electric Holdings
(NASDAQ:LECO)
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Select Model
Rating:75Outperform
Price Target:
$264.00
▲(12.58% Upside)
Lincoln Electric Holdings scores well due to its strong financial performance and strategic growth initiatives highlighted in the earnings call. However, the stock's valuation appears stretched, and technical indicators suggest mixed momentum, which tempers the overall score.
Positive Factors
Strong Financial Performance
The company's solid financial position, characterized by strong profitability and efficient cash management, supports its long-term stability and growth potential.
Strategic Acquisitions
The acquisition of Alloy Steel enhances Lincoln Electric's market position and is expected to improve margins and earnings, contributing to sustainable growth.
Dividend Increase
The dividend increase reflects strong cash flow generation and a commitment to shareholder returns, indicating confidence in long-term financial health.
Negative Factors
International Segment Challenges
Challenges in the International Welding segment, including sales declines, could impact overall growth and require strategic adjustments to regain momentum.
Volume Declines and Demand Uncertainty
Ongoing volume declines and demand uncertainty, particularly in capital spending, pose risks to revenue stability and require careful management.
Heavy Industries Challenges
Persistent challenges in heavy industries could limit sales growth, necessitating strategic focus on diversification and innovation to offset sector weaknesses.
Lincoln Electric Holdings (LECO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.94B
Dividend Yield1.25%
Average Volume (3M)314.96K
Price to Earnings (P/E)27.1
Beta (1Y)1.08
Revenue Growth0.24%
EPS Growth0.05%
CountryUS
Employees12,000
SectorIndustrials
Sector Strength72
IndustryManufacturing - Tools & Accessories
Share Statistics
EPS (TTM)N/A
Shares Outstanding55,186,253
10 Day Avg. Volume279,765
30 Day Avg. Volume314,964
Financial Highlights & Ratios
PEG Ratio-1.69
Price to Book (P/B)8.00
Price to Sales (P/S)2.65
P/FCF Ratio22.01
Enterprise Value/Market Cap0.97
Enterprise Value/Revenue3.08
Enterprise Value/Gross Profit8.44
Enterprise Value/Ebitda16.62
Forecast
1Y Price Target
$252.20Price Target Upside7.54% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Lincoln Electric Holdings Business Overview & Revenue Model
Company DescriptionLincoln Electric Holdings, Inc. is a global leader in the manufacturing of welding, cutting, and joining solutions. Founded in 1895 and headquartered in Cleveland, Ohio, the company operates in various sectors, including industrial manufacturing, construction, and energy. Lincoln Electric offers a comprehensive range of products, including arc welding equipment, robotic welding systems, plasma cutting machines, and filler metals, along with automation solutions and training services to enhance productivity and efficiency in welding processes.
How the Company Makes MoneyLincoln 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 Earnings Call Summary
Earnings Call Date:Oct 30, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Feb 12, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted strong sales growth and strategic acquisitions that are expected to drive future performance. However, volume declines and demand uncertainties, particularly in the International Welding segment and heavy industries, pose ongoing challenges. The overall sentiment is balanced with notable achievements and significant challenges.Q2-2025 Updates
Positive Updates
Strong Sales Growth and Profit Performance
Lincoln Electric reported a 7% sales growth driven by price management, M&A strategy, and improved volume performance in key segments. Adjusted earnings per share increased by 11% to $2.60, with a strong cash flow generation and a 100-plus percent cash conversion of free cash flow.
Acquisition of Alloy Steel
Lincoln Electric announced the acquisition of the remaining 65% interest in Alloy Steel, which is expected to be accretive to margins and earnings on day one, contributing $20 million to $25 million in sales for the remainder of the year.
Harris Products Group Performance
The Harris Products Group reported a 19% sales increase, with 11% higher volumes due to product rollout and ongoing strength in HVAC. Adjusted EBIT increased by 28% to $32 million, with a margin improvement to a record 19.4%.
Negative Updates
Volume Declines and Demand Uncertainty
Volume declines narrowed to 2.3% with customers deferring capital spending due to policy uncertainty, impacting equipment and automation portfolios. Automation sales have stabilized but remain below prior year levels.
International Welding Segment Challenges
The International Welding segment saw a sales decline of 2.5% with 7% lower volumes, due to weakened demand in the EMEA region and challenges in Asia Pacific.
Heavy Industries and Automotive Challenges
Heavy industries remain challenged, and automotive transportation volumes were compressed due to slower production levels, impacting overall sales performance.
Company Guidance
During the Lincoln Electric 2025 Second Quarter Financial Results Conference Call, the company provided guidance indicating a strong performance with a 7% sales growth attributed to price management, M&A strategy benefits, and improved volumes in the Americas Welding and Harris Products Group segments. The company achieved an 11% increase in adjusted earnings per share to $2.60 and maintained a cash conversion of over 100% of free cash flow. The report highlighted a top quartile return on invested capital (ROIC) performance. Lincoln Electric also announced the expected acquisition of the remaining 65% interest in Alloy Steel, expected to contribute $20 million to $25 million in sales for the remainder of the year, and be accretive to margins and earnings. The company expects low single-digit organic sales growth for the full year, with acquisitions contributing approximately 270 basis points in sales growth. They have successfully managed to maintain a neutral price/cost position amidst supply chain challenges and are continuing to implement operational efficiencies and savings actions to counteract inflation, projecting an additional $10 million to $15 million in savings in the second half of the year.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.85
Very Positive
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.78
Positive
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.82
Very Positive
| 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
Negative
234.51
Price Trends
238.45
Negative
229.73
Positive
210.37
Positive
Market Momentum
0.84
Negative
45.47
Neutral
44.27
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LECO, the sentiment is Negative. The current price of 234.51 is below the 20-day moving average (MA) of 237.49, below the 50-day MA of 238.45, and above the 200-day MA of 210.37, indicating a neutral trend. The MACD of 0.84 indicates Negative momentum. The RSI at 45.47 is Neutral, neither overbought nor oversold. The STOCH value of 44.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LECO.
Lincoln Electric Holdings Risk Analysis
Lincoln Electric Holdings disclosed 18 risk factors in its most recent earnings report. Lincoln Electric Holdings reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Lincoln Electric Holdings Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ― | $12.91B | 51.43 | 8.56% | ― | 5.48% | 16.88% | |
| ― | $5.52B | 17.56 | 10.52% | 1.79% | -2.01% | -9.95% | |
| ― | $12.94B | 27.06 | 37.35% | 1.25% | 0.24% | 0.05% | |
| ― | $17.53B | 17.96 | 17.96% | 2.50% | 0.24% | -1.85% | |
| ― | $1.74B | 18.97 | 7.35% | 3.53% | -3.91% | -12.49% | |
| ― | $10.83B | 22.79 | 5.38% | 4.70% | -2.71% | ― | |
| ― | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
LECO
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234.51
44.77
23.60%
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Lincoln Electric Holdings Corporate Events
Lincoln Electric’s Strong Q2 2025 Performance and Strategic Growth
Aug 1, 2025
Lincoln Electric Holdings, Inc., headquartered in Cleveland, Ohio, is a global leader in the engineering, design, and manufacturing of advanced arc welding solutions, automated joining, assembly and cutting systems, and holds a prominent position in brazing and soldering alloys. The company operates 71 manufacturing and automation system integration locations across 20 countries, serving customers in over 160 countries worldwide.
Lincoln Electric’s Strong Q2 Performance Amid Challenges
Aug 1, 2025
The recent earnings call for Lincoln Electric showcased a balanced outlook, highlighting strong financial performance in the second quarter of 2025. The company demonstrated positive impacts from acquisitions and effective cost management strategies. However, challenges such as volume declines, trade policy uncertainties affecting customer spending, and increased costs impacting margins were also noted.
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.