Lincoln Electric Holdings (LECO) AI Stock Analysis

• Market Cap: $12.51B
• Dividend Yield: 1.33%
• Average Volume (3M): 366.26K
• Price to Earnings (P/E): 27.7
• Beta (1Y): 1.19
• Revenue Growth: -2.29%
• EPS Growth: -14.49%
• Country: US
• Employees: 12,000
• Sector: Industrials
• Sector Strength: 89
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 2.60
• Shares Outstanding: 55,826,283
• 10 Day Avg. Volume: 308,763
• 30 Day Avg. Volume: 366,262
• PEG Ratio: 2.79
• Price to Book (P/B): 9.85
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 26.92
• Enterprise Value/Market Cap: 1.17
• Enterprise Value/Revenue: 0.91
• Enterprise Value/Gross Profit: 9.97
• Enterprise Value/Ebitda: 4.78
• 1Y Price Target: $240.33
• Price Target Upside: 7.61% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 76 Outperform
• Price Target: $244.00 ▲(9.26%Upside)

Lincoln Electric Holdings scores well due to its strong financial performance, positive technical momentum, and resilient earnings despite challenges. The high valuation and cautious outlook temper the overall score.

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. is a global leader in the design, development, and manufacturing of arc welding products, robotic arc welding systems, plasma and oxy-fuel cutting equipment. With its headquarters in Cleveland, Ohio, the company operates in the welding, cutting, and joining products sector. Lincoln Electric serves a diverse range of industries including automotive, aerospace, construction, and marine, providing them with essential products and services to enhance productivity and efficiency.

How the Company Makes Money

Lincoln Electric Holdings generates revenue primarily through the sale of its welding and cutting products, which include arc welding equipment, consumable welding products, and automation solutions. The company offers a comprehensive portfolio of welding machinery, consumables, and related accessories that are sold directly to industrial customers or through distributors. A significant portion of its revenue also comes from providing automation solutions and services, which are increasingly in demand as industries seek to improve efficiency and reduce labor costs. Lincoln Electric's earnings are further bolstered by its robust aftermarket services, including maintenance, repair, and training services, which provide recurring revenue streams. Key partnerships with distributors, as well as ongoing innovation in product development, contribute to the company's financial performance.

Lincoln Electric Holdings Financial Statement Overview

Summary

Lincoln Electric Holdings demonstrates strong profitability and cash flow management with a robust balance sheet. However, a decline in total revenue suggests a need for growth strategies.

Income Statement

Lincoln Electric Holdings demonstrates robust profitability with a consistent gross profit margin and solid EBIT margin. However, the recent decline in total revenue from $4.0 billion in 2024 to $3.4 billion in TTM (Trailing-Twelve-Months) suggests a need for revenue growth strategies. The net profit margin remains healthy, indicating effective cost management.

Balance Sheet

The company's balance sheet is strong with a low debt-to-equity ratio, improving from 0.84 in 2024 to 0.08 in TTM, reflecting reduced leverage. The equity ratio is stable, indicating a solid financial foundation. However, attention to maintaining equity levels is essential amid fluctuating liabilities.

Cash Flow

Lincoln Electric Holdings exhibits impressive cash flow management with substantial free cash flow growth, increasing from $482 million in 2024 to $534 million in TTM. The operating cash flow to net income ratio is favorable, highlighting efficient cash conversion, though maintaining this trajectory is crucial.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.03B	4.01B	4.19B	3.76B	3.23B	2.66B
Gross Profit	1.47B	1.47B	1.48B	1.28B	1.07B	871.34M
EBITDA	739.43M	736.70M	824.67M	700.14M	675.23M	410.35M
Net Income	461.18M	466.11M	545.25M	472.22M	276.58M	206.12M
Balance Sheet
Total Assets	3.63B	3.52B	3.38B	3.18B	2.59B	2.31B
Cash, Cash Equivalents and Short-Term Investments	394.70M	377.26M	393.79M	197.15M	192.96M	257.28M
Total Debt	1.26B	1.32B	1.16B	1.20B	769.82M	718.19M
Total Liabilities	2.28B	2.19B	2.07B	2.15B	1.73B	1.52B
Stockholders Equity	1.34B	1.33B	1.31B	1.03B	863.91M	790.25M
Cash Flow
Free Cash Flow	534.08M	482.37M	576.55M	311.50M	302.53M	292.16M
Operating Cash Flow	651.38M	598.98M	667.54M	383.39M	365.06M	351.36M
Investing Cash Flow	-357.59M	-361.23M	-74.73M	-504.69M	-205.36M	-49.21M
Financing Cash Flow	-263.73M	-244.64M	-412.39M	133.72M	-221.94M	-246.14M

Lincoln Electric Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 223.33
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 223.33 is above the 20-day moving average (MA) of 223.13, above the 50-day MA of 209.56, and above the 200-day MA of 198.17, indicating a bullish trend. The MACD of 6.09 indicates Negative momentum. The RSI at 75.97 is Negative, neither overbought nor oversold. The STOCH value of 67.73 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
SNA	78 Outperform	$16.97B	17.34	18.18%	2.57%	-0.76%	-2.62%
RBC	77 Outperform	$12.15B	50.10	8.51%	―	4.87%	19.66%
LECO	76 Outperform	$12.51B	27.65	37.35%	1.33%	-2.29%	-14.49%
Sector *	71 Outperform	¥264.85B	14.09	8.47%	2.87%	6.39%	13.10%
KMT	71 Outperform	$1.92B	18.22	8.69%	3.17%	-2.93%	2.74%
TKR	71 Outperform	$5.67B	18.42	10.52%	1.80%	-2.01%	-9.95%
SWK	64 Neutral	$10.61B	21.76	5.38%	4.84%	-2.71%	―

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.