Allegion plc (ALLE) Valuation

Based on the GoodMoat Target of $186.26, the current price of $147.48 implies a margin of safety of approximately 21%. According to the GoodMoat Investment Framework, a margin of safety between 20% and 40% falls into the 'Favourable' band for valuation. This suggests the stock is trading at a discount to its estimated intrinsic value. The forward P/E of 19.7x is reasonable for a company with a 9.3% revenue growth rate and a high ROE of 31.1%, especially when compared to the broader industrials sector, which often trades at similar or higher multiples for lower profitability. The P/E does not appear stretched relative to the company's own history or its growth profile. The free cash flow yield of 5.4% is attractive and provides a solid foundation for the valuation. While the debt-to-equity ratio of 0.96 indicates leverage, it is manageable for a stable industrial business. Overall, the valuation assessment indicates the stock is not expensive and may be cheap relative to its demonstrated quality, particularly its high returns on equity and solid operating margin of 21.1%.