Education
About Us
Working with TipRanks
Follow Us
Lincoln Electric (LECO)
NASDAQ:LECO
Top Page
Lincoln Electric Holdings
(NASDAQ:LECO)
Select Model
Select Model
Rating:77Outperform
Price Target:
$269.00
▲(5.15% Upside)
Lincoln Electric Holdings demonstrates strong financial performance and a positive technical trend, contributing significantly to its overall score. The earnings call highlights steady growth with some challenges, particularly in the automation segment and EMEA region. Valuation metrics suggest the stock is moderately priced, with a modest dividend yield.
Positive Factors
Revenue Growth
The 8% sales increase, driven by pricing strategies, indicates strong market demand and effective pricing power, supporting long-term revenue growth.
Cash Flow Generation
Strong cash flow generation with a high conversion ratio enhances financial flexibility, allowing for reinvestment and shareholder returns.
Profitability
The significant margin expansion reflects improved operational efficiency and cost management, supporting sustainable profitability.
Negative Factors
Automation Segment Challenges
Challenges in the automation segment due to deferred spending could limit growth in this strategic area, impacting future revenue streams.
EMEA Region Weakness
Weak demand in the EMEA region poses a risk to international sales growth, potentially affecting overall revenue and market expansion.
Higher SG&A Expenses
Rising SG&A expenses can pressure margins and reduce profitability, necessitating careful cost management to maintain financial health.
Lincoln Electric Holdings (LECO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.08B
Dividend Yield1.22%
Average Volume (3M)254.31K
Price to Earnings (P/E)27.4
Beta (1Y)1.08
Revenue Growth3.27%
EPS Growth10.89%
CountryUS
Employees12,000
SectorIndustrials
Sector Strength72
IndustryManufacturing - Tools & Accessories
Share Statistics
EPS (TTM)2.47
Shares Outstanding55,026,176
10 Day Avg. Volume228,279
30 Day Avg. Volume254,306
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 Cap1.00
Enterprise Value/Revenue3.38
Enterprise Value/Gross Profit9.22
Enterprise Value/Ebitda17.46
Forecast
1Y Price Target
$258.25Price Target Upside0.95% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)10.79
Revenue Forecast (FY)$4.51B
Lincoln Electric Holdings Business Overview & Revenue Model
Company DescriptionLincoln 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 MoneyLincoln Electric generates revenue through several key streams, primarily by selling welding and cutting equipment, consumables, and related services. The company operates in multiple geographical regions, with significant sales in North America, Europe, and Asia, capitalizing on the growing demand for welding solutions in various industries. A substantial portion of its revenue comes from the sale of welding consumables, which includes electrodes and wires used in welding processes. Additionally, Lincoln Electric earns income through the sale of automated welding systems and robotic solutions, catering to manufacturers seeking to enhance productivity and efficiency. The company also provides training, technical support, and maintenance services, creating long-term relationships with customers. Strategic partnerships with industrial manufacturers and distributors enhance its market reach and contribute to its earnings by expanding product availability and customer access.
Lincoln Electric Holdings Earnings Call Summary
Earnings Call Date:Oct 30, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 12, 2026
Earnings Call Sentiment Neutral
The earnings call reflected a mix of steady growth and some challenges. While the company has shown strong performance in sales, pricing, and cash flow, it faces challenges in its automation segment and EMEA region. The overall outlook is cautiously optimistic with strategic positioning for future growth.Q3-2025 Updates
Positive Updates
Sales Increase and Price Management
Sales increased 8% driven by pricing and M&A strategy. The company achieved a neutral price cost position and generated $8 million in permanent savings, leading to a 15% increase in adjusted earnings per share and record cash flow generation with 149% cash conversion.
Organic Sales Growth
Organic sales increased 5.6%, with low single-digit volume growth in Americas welding equipment. Automation order rates showed a broad increase in September and October.
Harris Products Group Performance
The Harris Products Group saw a 15% sales increase with 2% higher volumes and nearly 12% higher price, achieving a record 18.3% EBIT margin.
International Welding Segment Improvement
International Welding segment sales increased 1.6%, with a 29% increase in adjusted EBIT and a margin increase of 230 basis points to 11.3%.
Record Cash Flow
Generated record cash flow from operations with a 119% cash conversion ratio and announced a 30th consecutive annual dividend payout rate increase of 5.3%.
Strategic Positioning for Future Growth
The company is well-positioned for future growth with strategic investments and a focus on long-term growth, supporting superior shareholder returns.
Negative Updates
Automation Segment Challenges
The automation portfolio was challenged by deferred capital spending in the automotive and heavy industry sectors, with sales slightly below expectations.
EMEA Region Weakness
The company experienced sluggish demand in the EMEA region, impacting sales performance.
Higher SG&A Expenses
SG&A expense increased 11% due to a challenging prior year comparison and an increase in variable costs associated with incentive compensation programs.
HVAC Sector Softening
Expected softening in HVAC production in Q4, which could impact the Harris Products Group segment's performance.
Company Guidance
During the Lincoln Electric 2025 Third Quarter Financial Results Conference Call, the company reported an 8% increase in sales, driven by pricing strategies and demand for short-cycle products in the Americas Welding and Harris Products Group segments. Despite challenges in the automation portfolio and sluggish demand in the EMEA region, the company achieved a 15% increase in adjusted earnings per share and record cash flow generation with a 149% cash conversion rate. Organic sales rose by 5.6%, with notable improvements in welding equipment volumes in the Americas. Automation sales reached approximately $200 million globally, with expectations of a 15% to 20% sequential increase in the fourth quarter. Across various market segments, the company observed steady to higher organic sales growth, particularly in general industries, HVAC, and midstream energy, while automotive capital spending showed potential for growth in early to mid-2026. Lincoln Electric's operating income margin increased by 500 basis points since 2020, with earnings more than doubling at a high-teens annual compounded growth rate, contributing to over a 165% total shareholder return through the third quarter.Lincoln Electric Holdings Financial Statement Overview
Summary
Lincoln Electric Holdings exhibits strong financial health with consistent revenue growth and profitability. The company maintains a balanced leverage position and demonstrates effective cash flow management. Minor fluctuations in operating efficiency are noted, but the overall financial trajectory remains positive.Income Statement
Lincoln Electric Holdings demonstrates strong revenue growth with a TTM increase of 1.89%, following a slight decline in the previous year. The gross profit margin remains stable at around 36%, indicating efficient cost management. The net profit margin has improved to 12.56% TTM, showcasing enhanced profitability. However, the EBIT margin has slightly decreased to 12.58% TTM, suggesting some pressure on operating efficiency.85
Very Positive
Balance Sheet
The company's debt-to-equity ratio has improved to 0.94 TTM, reflecting a balanced approach to leveraging. Return on equity is robust at 38.43% TTM, indicating strong profitability relative to shareholder equity. The equity ratio stands at 37.08% TTM, suggesting a solid equity base, though there is room for improvement in asset financing.78
Positive
Cash Flow
Lincoln Electric Holdings shows a healthy free cash flow growth of 8.23% TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 1.26 TTM, reflecting efficient cash conversion. The free cash flow to net income ratio is 0.83 TTM, demonstrating effective cash management despite a slight decline from previous periods.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.18B | 4.01B | 4.19B | 3.76B | 3.23B | 2.66B |
| Gross Profit | 1.53B | 1.48B | 1.48B | 1.28B | 1.07B | 871.34M |
| EBITDA | 808.21M | 800.52M | 789.48M | 708.11M | 675.23M | 410.35M |
| Net Income | 524.74M | 466.11M | 545.25M | 472.22M | 276.58M | 206.12M |
Balance Sheet | ||||||
| Total Assets | 3.82B | 3.52B | 3.38B | 3.18B | 2.59B | 2.31B |
| Cash, Cash Equivalents and Short-Term Investments | 293.00M | 377.26M | 393.79M | 197.15M | 192.96M | 257.28M |
| Total Debt | 1.29B | 1.32B | 1.16B | 1.25B | 819.00M | 763.68M |
| Total Liabilities | 2.40B | 2.19B | 2.07B | 2.15B | 1.73B | 1.52B |
| Stockholders Equity | 1.41B | 1.33B | 1.31B | 1.03B | 864.10M | 789.27M |
Cash Flow | ||||||
| Free Cash Flow | 546.49M | 482.37M | 576.55M | 311.50M | 302.53M | 292.16M |
| Operating Cash Flow | 662.00M | 598.98M | 667.54M | 383.39M | 365.06M | 351.36M |
| Investing Cash Flow | -240.15M | -361.23M | -74.73M | -504.69M | -205.36M | -49.21M |
| Financing Cash Flow | -517.74M | -244.64M | -412.39M | 133.72M | -221.94M | -246.14M |
Lincoln Electric Holdings Technical Analysis
Positive
255.82
Price Trends
239.75
Positive
238.93
Positive
221.95
Positive
Market Momentum
4.29
Negative
70.34
Negative
84.70
Negative
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 255.82 is above the 20-day moving average (MA) of 247.62, above the 50-day MA of 239.75, and above the 200-day MA of 221.95, indicating a bullish trend. The MACD of 4.29 indicates Negative momentum. The RSI at 70.34 is Negative, neither overbought nor oversold. The STOCH value of 84.70 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $18.85B | 19.00 | 17.96% | 2.52% | 0.24% | -1.85% | |
77 Outperform | $14.08B | 27.41 | 38.11% | 1.22% | 3.27% | 10.89% | |
77 Outperform | $15.47B | 60.65 | 8.54% | ― | 8.27% | 19.06% | |
76 Outperform | $6.40B | 21.74 | 9.80% | 1.61% | -1.01% | -12.13% | |
67 Neutral | $12.98B | 28.99 | 4.92% | 4.42% | -1.40% | ― | |
66 Neutral | $2.55B | 27.49 | 7.36% | 2.74% | -2.63% | -4.46% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
LECO
Lincoln Electric Holdings
263.56
71.50
37.23%
KMT
Kennametal
34.56
11.00
46.68%
RBC
RBC Bearings
497.06
187.51
60.58%
SNA
Snap-on
363.45
27.02
8.03%
SWK
Stanley Black & Decker
84.40
4.18
5.20%
TKR
Timken Company
93.73
18.26
24.20%
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.