Legrand's Underlying Performance Much More Modest Than Reported Results
Legrand's nine-month results for 2017 have turned out revenue growth and EBIT margins trending higher than 2016, but we see the 20% year-to-date share rally as overdone, given the more modest organic performance and reported results buoyed by acquired growth. With organic revenue growth trending at around 2% in the past two quarters and the operating EBIT margin at historic highs, we believe the market and consensus are factoring in little risk of disappointment. We view the shares as overvalued...Legrand is a global specialist in electrical and digital building infrastructure based in France. Co. offers a full range of control-and-command, cable management, energy distribution and "Voice-Data-Image" products and systems which are suitable for the international commercial, industrial, and residential segments of the low voltage market. Co. markets its products under internationally recognized general brand names, including Legrand and Bticino. Each product group is marketed in all of Co.'s major geographic markets (France, Italy, Rest of Europe, USA/Canada and Rest of the World).
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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