LR FP

LEGRAND SA

Industrial/Transportation


Presented:06/14/2021
Price:€88.00
Cap:$26.20B
Current Price:€103.55
Cap:$30.23B

Presented

Date06/14/2021
Price€88.00
Market Cap$26.20B
Ent ValueN/A
P/E Ratio31.7x
Book ValueN/A
Div Yield1.61%
Shares O/S267.32M
Ave Daily Vol539,410
Short IntN/A

Current

Price€103.55
Market Cap$30.23B
Legrand SA is a holding company, which engages in the manufacture of electrical and digital building infrastructures. Its services include the provision of control and command of electric power, cable management, power distribution, and voice-data-image distribution. The company was founded in 1926 and is headquartered in Limoges, France.

Publicly traded companies mentioned herein: Eaton Corp PLC (ETN), Legrand SA (LR FP)

Highlights

Within the industrials sector, the presenter is focused on steady, high-quality compounders trading at reasonable multiples. He is long shares of Legrand SA (LR FP), a French company operating in the building electrification space. LR has strong 53% gross margins and generates EBIT margins in the low-20% range, which indicates to the presenter that LR is a high quality business with pricing power while also offering high touch service that creates customer loyalty. Going forward, he expects the volume backdrop to improve while operating leverage and pricing power drives margin expansion. This upside is not reflected in Street numbers due to conservative guidance, and he therefore views LR’s €86 share price as undervalued. He sees upside to €115 – €120 by year-end 2022 based on a mid-20x EPS multiple and limited downside to €80 per share. 

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Idea Discussion

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