Allegion PLC (NYSE:ALLE) stock rose Friday after the company reported stronger-than-expected third-quarter earnings, raised its full-year outlook and secured an upgrade from Bank of America (BofA), alongside higher price forecasts from other analysts.
BofA analyst Rafe Jadrosich upgraded Allegion to Buy from Neutral, citing accelerating organic growth, improving volume trends, and better visibility into 2027.
Jadrosich also raised his price forecast to $200 from $164. The firm said stronger demand, improving earnings leverage, and a more favorable growth outlook support a higher valuation.
Q3 Beat Reinforces BofA's Recovery Thesis
Allegion reported adjusted EPS of $2.60, above the $2.50 Wall Street estimate, and sales of $1.173 billion, above the $1.137 billion estimate, according to MarketDash Pro.
The company also raised its full-year outlook. GAAP EPS guidance increased to $8.35-$8.40 from $7.95-$8.10, while adjusted EPS guidance rose to $9.05-$9.10 from $8.85-$9.00.
Allegion also lifted its 2026 sales outlook to $4.453 billion-$4.494 billion from $4.372 billion-$4.413 billion.
BofA highlighted the acceleration in the Americas business. Revenue rose about 12%, while organic growth reached roughly 9%, driven by 4.5% pricing and 4.6% volume growth.
Jadrosich noted that the improvement came against Allegion's toughest comparison of the year, increasing his confidence that the recovery reflects underlying demand rather than easier comparisons.
Non-residential revenue grew at a low-double-digit pace, with BofA pointing to broad-based strength, data-center demand and strong specification activity as supports for continued growth into 2027.
BofA Raises Estimates And Valuation
Jadrosich raised BofA's EPS forecasts by 3% for 2026, 9% for 2027 and 11% for 2028, to $9.10, $10.09 and $10.76, respectively.
Revenue estimates increased to $4.474 billion, $4.746 billion and $4.941 billion over the same period.
BofA now values Allegion at 15.5 times 2027 estimated EV/EBITDA, up from 13.5 times previously, supporting the $200 forecast.
The analyst said better visibility into 2027 could support further estimate upside and multiple expansion.
Management Points To Continued 2027 Momentum
Management's earnings-call commentary supported that outlook.
CEO John Stone said data centers now represent about 5% of Allegion's non-residential business and continue to grow rapidly.
He also said specification activity supports a high-single-digit growth environment for Americas non-residential in 2027, with contributions from price and volume.
Residential remains the softer part of the portfolio. Stone said underlying volumes are roughly flat and expects 2027 residential growth to come primarily from pricing, given continued pressure from inflation and interest rates.
CFO Mike Wagness also said Allegion expects inflation to remain elevated next year and signaled another pricing action around early February.
Other Analysts Raise Price Forecast
BofA's upgrade came alongside other positive forecast revisions.
JPMorgan maintained a Neutral rating and raised its price forecast to $183 from $170, while Evercore ISI maintained an Outperform rating and increased its forecast to $190 from $180.
ALLE Price Action: Allegion shares were up 2.00% at $180.05 at the time of publication on Friday. The stock is approaching its 52-week high of $183.11, according to MarketDash Pro data.
