LEGRAND (LR) AI Stock Analysis

• Market Cap: €28.39B
• Dividend Yield: 1.93%
• Average Volume (3M): 579.00K
• Price to Earnings (P/E): 24.0
• Beta (1Y): 1.06
• Revenue Growth: 7.27%
• EPS Growth: 8.90%
• Country: FR
• Employees: 33,959
• Sector: Industrials
• Sector Strength: 90
• Industry: Electrical Equipment & Parts
• EPS (TTM): 1.12
• Shares Outstanding: 262,245,730
• 10 Day Avg. Volume: 523,385
• 30 Day Avg. Volume: 579,002
• PEG Ratio: 2.01
• Price to Book (P/B): 3.59
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.94
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €115.00
• Price Target Upside: 6.98% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

Legrand demonstrates strong financial performance with consistent growth and profitability, supported by a solid balance sheet. However, technical analysis shows mixed signals, with potential resistance and overbought conditions, which may limit short-term upside. The valuation appears fair, with a reasonable P/E ratio and a modest dividend yield. Overall, Legrand's stock is positioned as a stable investment with moderate growth potential, but investors should be cautious of current technical signals.

Positive Factors

Strategic Acquisitions

Legrand significantly scaled up its exposure to data centers via M&A, increasing its proforma group sales by 25%.

Unique Growth Strategy

Legrand starts recording organic growth from the day an acquired company is consolidated, allowing it to receive an organic growth contribution a full year before peers.

Negative Factors

Guidance Expectations

Expecting weaker FY25 guidance vs the Street; organic growth gap vs Mag 3 will continue to widen.

Valuation Concerns

An ever-increasing cumulative growth gap to the Mag 3 in EU Electricals justifies applying a 15% valuation discount vs just 6% now.

LEGRAND Business Overview & Revenue Model

Company Description

Legrand (LR) is a global leader in electrical and digital building infrastructures. The company operates across multiple sectors, including energy distribution, lighting management, and data networks. Legrand's core products and services encompass a wide range of solutions such as switches, sockets, building systems, and cable management, catering to residential, commercial, and industrial markets worldwide.

How the Company Makes Money

Legrand makes money primarily through the sale of electrical and digital building infrastructure solutions. Its revenue model is based on a diverse portfolio of products that serve various segments like residential, commercial, and industrial. Key revenue streams include sales of wiring devices, cable management systems, and lighting control systems. The company also benefits from strategic acquisitions that expand its product offerings and market reach. Additionally, Legrand has established significant partnerships with distributors and integrators, which help in enhancing its market penetration and driving sales volume.

LEGRAND Financial Statement Overview

Summary

Legrand exhibits strong financial health with consistent revenue growth (2.8%) and profitability. The company has a solid balance sheet with a balanced capital structure, though a slight increase in debt and a decrease in free cash flow are points to monitor. Overall, the financial performance reflects a stable and growing enterprise.

Income Statement

Legrand's income statement shows strong and consistent growth. The gross profit margin for 2024 is 51.6%, indicating effective cost management. The net profit margin improved to 13.5%, reflecting strong profitability. Revenue growth from the previous year is 2.8%, indicating steady expansion. The EBIT margin stands at 19.0% and the EBITDA margin at 24.4%, further showcasing operational efficiency. Overall, the company demonstrates strong and stable financial performance with consistent revenue growth and profitability.

Balance Sheet

Legrand's balance sheet is solid with a debt-to-equity ratio of 0.68, showing a balanced capital structure. The return on equity (ROE) is a robust 15.5%, indicating efficient use of equity. The equity ratio is 46.9%, suggesting a healthy level of equity financing. However, the total debt has increased slightly over the year, which could be a point of caution. Overall, the company maintains a stable and strong financial position with efficient equity utilization.

Cash Flow

The cash flow statement highlights a strong operating cash flow to net income ratio of 1.31, indicating efficient cash generation. Free cash flow decreased by 18.9% from the previous year, primarily due to higher capital expenditures, which could be an area to monitor. The free cash flow to net income ratio is 1.10, suggesting good cash profitability. Legrand demonstrates a robust ability to generate cash, though the decline in free cash flow warrants attention.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
8.65B	8.42B	8.34B	6.99B	6.10B
	Gross Profit
4.47B	4.40B	4.15B	3.56B	3.18B
	EBIT
1.64B	1.59B	1.45B	1.34B	1.07B
	EBITDA
2.11B	2.04B	1.88B	1.66B	1.39B
	Net Income Common Stockholders
1.17B	1.15B	999.50M	904.50M	681.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.08B	2.82B	2.40B	2.79B	2.79B
	Total Assets
16.07B	14.84B	14.42B	14.03B	12.91B
	Total Debt
5.09B	4.82B	4.67B	5.31B	5.39B
	Net Debt
3.01B	2.01B	2.33B	2.53B	2.60B
	Total Liabilities
8.53B	8.11B	7.77B	8.31B	8.00B
	Stockholders Equity
7.53B	6.72B	6.64B	5.72B	4.90B
Cash Flow		Free Cash Flow
1.28B	1.58B	1.03B	1.08B	1.01B
	Operating Cash Flow
1.52B	1.84B	1.24B	1.11B	1.16B
	Investing Cash Flow
-1.74B	-413.30M	-463.50M	-466.90M	-850.40M
	Financing Cash Flow
-535.80M	-927.00M	-1.23B	-687.10M	823.70M

LEGRAND Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 107.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:LR, the sentiment is Positive. The current price of 107.5 is above the 20-day moving average (MA) of 98.44, above the 50-day MA of 99.57, and above the 200-day MA of 99.43, indicating a bullish trend. The MACD of 2.53 indicates Negative momentum. The RSI at 68.14 is Neutral, neither overbought nor oversold. The STOCH value of 90.98 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FR:LR.

LEGRAND Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RMS	81 Outperform	$265.69B	57.80	28.67%	0.93%	12.98%	6.62%
EN	80 Outperform	€14.11B	13.34	8.43%	5.08%	1.31%	2.42%
TEP	80 Outperform	€5.82B	11.09	11.90%	3.90%	23.19%	-14.73%
LR	75 Outperform	€28.39B	24.03	16.37%	1.93%	7.27%	8.90%
VIE	72 Outperform	€21.73B	19.52	13.14%	4.20%	-1.45%	14.74%
Sector *	64 Neutral	$4.38B	12.03	5.25%	249.91%	4.11%	-11.02%
SAF	59 Neutral	€104.31B	62.44	-6.13%	0.88%	17.19%	-119.44%