ALLE US S&P 500Russell 1000 Earnings call · transcribed from the recording
Allegion (ALLE) · Q2 2026 results and valuation
Share price: $191.09 · 2026-11-11
Allegion provides security products and access control solutions, including door hardware, electronic locks, and security software. The company serves commercial, institutional, and residential customers in the education, healthcare, government, and hospitality sectors globally. Source: 10-K annual report (2026-02-17)
Results Q2 2026 vs Q1 2026 · previous quarter · published 23 Jul 2026 and 28 Apr 2026
Net income up 33.7% on the previous quarter. Management sounded cautious, in its script and in answers to analysts.
1 · Numbers
+33.7%
Net income vs Q1 2026
Outlook given
Net income 184.6M vs 138.1M
Revenue +11.4%
Against the same quarter last year (Q2 2025) it is +15.6% — part of the move on last quarter is seasonal.
Why Against the same quarter last year (+15.6%), net income rose because organic revenue growth in the Americas, nonresidential, and residential businesses was driven by both price and volume, while pricing and productivity provided a $11.8 million tailwind to margins.
2 · How management spoke
Cautious
Among the least upbeat of all company calls
Answers to analysts: upbeat, in line with the script.
Similar to last call.
3 · What stood out
Allegion raised its organic revenue growth outlook to 3.5% to 4.5% and adjusted its earnings per share outlook to $8.85 to $9.00.
Valuation
Is Allegion undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 7.5% growth a year (3-year revenue growth), the model's fair value is $139.35 a share — the stock trades 37% above it. Today's price assumes 11.4% growth a year.
Current price
$191.09
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+11.4% for 10 yrs
Fair value / share
$139.35
Buy below
$104.52
Price vs fair value
Overvalued 37%
Price vs buy-below price
Overvalued 83%
Management expects
Revenue +4% · from the Q2 2026 report: “The company raised its organic revenue growth outlook to 3.5% to 4.5% and adjusted earnings per share outlook to $8.85 to $9.00.”
A guidance figure for revenue, usually one year ahead, not a 10-year free-cash-flow rate.
Read between the lines
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Guidance
The company raised its organic revenue growth outlook to 3.5% to 4.5% and adjusted earnings per share outlook to $8.85 to $9.00.
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Figure
Revenue for the second quarter was approximately $1.2 billion, which is an increase of 12.7% compared to last year.
Source quote
“Revenue for the second quarter was approximately $1.2 billion, an increase of 12.7% compared to last year.”
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Guidance
The company expects to deliver high single-digit to low double-digit EPS growth in 2026 in line with its long-term earnings framework.
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Guidance
Allegeries lowered its full-year outlook to a low single-digit organic decline because weak market demand in Europe, particularly Germany, offset expectations for better revenue and margin performance.
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Key theme
The nonresidential business increased high single digits organically due to price and volume growth.
Source quote
“Our nonresidential business increased high single digits organically, driven by price and volume growth.”
4 more
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Guidance
The company expects an annual benefit of $10 million based on the full year amount.
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Guidance
The company expects to be included in new hyperscaler campus builds as a key theme for this quarter.
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Key theme
Management stated that the momentum and strength of the company continued through the second quarter, reaching levels not seen since the speaker joined the company.
Source quote
“That strength, that momentum has continued through second quarter. It's as strong as I've seen since I joined the company.”
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Key theme
Point of sale and retail remained strong in Q2 2026 due to electronics.
Source quote
“But the point of sale and retail, like Mike said, has been pretty strong and strong because of electronics.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q2 2026. Ring: Q1 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“And while we expect better revenue and margin performance in the second half, weak market demand in Europe, particularly Germany, supports reducing our full year outlook to a low single-digit...”
“In summary, Allegion delivered double-digit revenue growth, high teens adjusted earnings per share growth and return capital to shareholders.”
“Our nonresidential business increased high single digits organically, driven by price and volume growth.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-06-30)
| Metric | Q2 2026period end 2026-06-30 | Q1 2026period end 2026-03-31 | Change | Q2 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 1.15B | 1.03B | +11.4% | 1.02B | +12.7% |
| Gross profit | 517.5M | 454.5M | +13.9% | 466.5M | +10.9% |
| Operating income | 254.7M | 195.3M | +30.4% | 219.7M | +15.9% |
| Net income | 184.6M | 138.1M | +33.7% | 159.7M | +15.6% |
| EPS | 2.15 | 1.59 | +35.2% | 1.85 | +16.2% |
| P/E today 23.1 | 18.4 | 19.8 | −1.4 | 20.0 | −1.6 |
Topics
Most discussed now
- Allegion saw strong sequential margin improvement and expect to build on that in the second half of the year.
- Allegion announced pricing actions in the quarter to cover the higher inflation it was experiencing, and it will continue to monitor...
- As you think moving forward, non-res feel real good.
- Resi demand has been really solid, and Allegion feels it will continue to have strong demand patterns moving forward when you...
- You could have seen a little pull forward as you think of Q3 into Q2, but not much.
Faded since Q1 2026
- Fading While Allegion's core demand assumptions are unchanged from its February call, I'll provide some additional details on its view for...
- Fading As you'll see on the next slide, Allegion remains committed to balanced, disciplined and consistent capital deployment.
- Dropped You could imagine smaller projects or maybe multifamily office renovations for tenant improvements could be pretty quick, something like…
- Dropped As always, there's an enormous amount of details to work through on all the different trade policies.
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Results of operations · SEC 8-K
Allegion reported Q3 2026 revenues of $1,172.6 million, up 9.6% year-over-year, and adjusted EPS of $2.60, up 13.0% compared to $2.30 in the same period last year.
- Director or officer change; Regulation FD disclosure · SEC 8-K
Allegion appointed Serge Zappone as President, International and Senior Vice President, effective January 1, 2027, to succeed Tim Eckersley, who will retire on December 31, 2026.
- Results of operations · SEC 8-K
Allegion reported Q2 2026 revenues of $1,151.5 million, up 12.7% year-over-year, and net earnings per share of $2.15, up 16.2% compared to $1.85 in the same period last year.
- Shareholder vote results · SEC 8-K · routine
- Results of operations · SEC 8-K
Allegion reported Q1-2026 revenues of $1,033.6 million, up 9.7% year-over-year, with net earnings per share of $1.59 compared to $1.71 in the same period last year.
- Other events · SEC 8-K
On April 15, 2026, the Board replenished the share repurchase program, authorizing the repurchase of up to $500 million of the Company's ordinary shares.
- Results of operations · SEC 8-K
Allegion reported full-year 2025 revenues of $4,067.3 million, up 7.8% year-over-year, with adjusted earnings per share of $8.14, up 8.1% compared to $7.53.
- Material agreement; New financial obligation · SEC 8-K
Allegion plc entered into a First Amendment to Credit Agreement with Bank of America, N.A. and other lenders on December 9, 2025.
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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second half of the year
build on [sequential margin improvement]
Source quote
“We saw strong sequential margin improvement and expect to build on that in the second half of the year.”
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not specified
raised adjusted EPS outlook to $8.85 to $9.00
Source quote
“We are raising our adjusted EPS outlook to $8.85 to $9.00.”
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second half
remain active in share repurchases
Source quote
“At current share price levels, we do see attractive valuation in our shares and expect to remain active in the second half.”
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2026
ACF conversion
Source quote
“For 2026, we still anticipate our ACF conversion will be approximately 85% to 95% of adjusted net income.”
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the second half
Americas margin expansion
Source quote
“As we said in the first quarter, we expect Americas margin expansion in the second half.”