Is Allegion (ALLE) Still Attractive After Recent Share Price Weakness And DCF Upside Estimate

Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE.

If you are wondering whether Allegion's current share price still offers value, or if most of the opportunity is already priced in, this article breaks down what the numbers actually say. Allegion recently closed at US$130.43, with the stock edging up 1.5% over the past week, falling 10.7% over the past month, down 18.9% year to date, and down 6.4% over the last year. It is still sitting 27.3% higher over three years and is roughly flat over five years. Recent coverage has focused on how Allegion fits within the broader building products space and what its share price path over the past few years suggests about changing risk appetite among investors. This context helps frame whether the recent declines are just noise after a longer run up, or a signal that the stock's perceived risk profile has shifted. On Simply Wall St's valuation framework, Allegion earns a 5 out of 6 valuation score, which means it screens as undervalued on most checks. This sets up a closer look at multiples, cash flow based methods, and a broader way of thinking about valuation at the end of this article.

Find out why Allegion's -6.4% return over the last year is lagging behind its peers.

Approach 1: Allegion Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a stock might be worth by projecting the cash it could generate in the future and then discounting those cash flows back to today using a required rate of return.

For Allegion, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month Free Cash Flow stands at about $682.7 million. Analyst and extrapolated projections see Free Cash Flow figures in the mid to high $600 million range over the next few years, reaching a projected $856 million in 2030, with later years extending modestly higher based on Simply Wall St estimates.

When these projected cash flows are discounted back, the DCF model produces an estimated intrinsic value of about $138.27 per share. Compared with the recent share price of $130.43, that suggests the stock trades at roughly a 5.7% discount to this DCF estimate, which is a small gap rather than a deep mismatch.

Result: ABOUT RIGHT

Allegion is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.ALLE Discounted Cash Flow as at May 2026

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Allegion.

Story Continues

Approach 2: Allegion Price vs Earnings

For a profitable company like Allegion, the P/E ratio is a straightforward way to think about what you are paying for each dollar of current earnings. It ties directly to the bottom line, which many investors watch most closely.

A “normal” or “fair” P/E tends to be higher when investors expect stronger earnings growth and are comfortable with the risks, and lower when growth expectations are more muted or the risk profile is higher. Allegion currently trades on a P/E of 17.69x, compared with the Building industry average of about 21.26x and a peer average of 69.03x.

Simply Wall St’s Fair Ratio for Allegion is 23.01x. This is a proprietary estimate of what the P/E could reasonably be, given factors such as earnings growth, profit margins, market cap, industry and company specific risks. Because it blends these drivers into one number, it offers a more tailored reference point than a simple comparison with peers or the broad industry.

Stacking the current 17.69x P/E against the 23.01x Fair Ratio suggests Allegion trades at a discount to that Fair Ratio, so on this measure the stock screens as undervalued.

Result: UNDERVALUEDNYSE:ALLE P/E Ratio as at May 2026

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 20 top founder-led companies.

Upgrade Your Decision Making: Choose your Allegion Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives let you attach a clear story about Allegion to the numbers by linking your view of its future revenue, earnings and margins to a financial forecast, then to a fair value that you can easily compare with the current share price inside Simply Wall St's Community page. Millions of investors share views there that update automatically when new news or earnings arrive. For Allegion, you might see one investor using the higher analyst fair value of about US$189.00, based on stronger confidence in margin resilience and acquisitions. Another might anchor on the lower US$155.00 view that focuses more on risks around nonresidential cycles and international weakness. Those different Narratives give you a simple, transparent way to judge whether the current price looks high or low relative to the story you find most reasonable.

Do you think there's more to the story for Allegion? Head over to our Community to see what others are saying!NYSE:ALLE 1-Year Stock Price Chart

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include ALLE.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

View Comments