Allegion Raises 2026 Outlook After Americas Non-Residential Strength

The Tip Desk · October 22, 2026 · 4 min read

The security-products maker posted $1,172.6 million of third-quarter revenue and lifted full-year adjusted EPS to $9.05 to $9.10.

Allegion plc (ALLE), a global security products and solutions provider, raised its full-year 2026 outlook for a second consecutive quarter after Americas non-residential demand stayed strong and organic sales growth ticked higher.

The company now expects full-year reported revenue growth of 9.5% to 10.5% and organic growth of 5.0% to 6.0%, and it raised the adjusted EPS range to $9.05 to $9.10. Reported EPS is expected at $8.35 to $8.40. Adjustments to 2026 EPS include about $0.60 a share for acquisition-related amortization, $0.28 a share for restructuring, M&A and other items, and a $0.18 a share benefit for tariff refunds. The outlook assumes an adjusted effective tax rate of about 18% to 19% and an average diluted share count of about 85.6 million shares.

President and CEO John H. Stone said the company delivered high-single digit organic revenue growth and low-teens adjusted EPS growth led by Americas non-residential, and that with steady momentum in its demand-generation engine it is raising the full-year revenue and adjusted EPS outlook.

Third-quarter net revenues were $1,172.6 million, up 9.6% from a year earlier. Organic revenue, which excludes acquisitions, divestitures and currency, rose 7.2%, a faster year-over-year pace than the 6.9% organic increase in the second quarter. Reported growth slowed from 12.7% in the prior quarter as the acquisitions-and-divestitures contribution fell to 2.6% from 5.1%. Currency was a 0.2% headwind. The company said the organic increase was driven by volume growth and price realization.

Net earnings were $220.9 million, or $2.59 a share, compared with $2.18 a share. Adjusted earnings were $2.60 a share, up 13.0% from $2.30 a share, a slower year-over-year rate than the 17.6% adjusted EPS increase in the second quarter.

Operating income was $284.6 million, and the operating margin was 24.3%, compared with 21.8% a year earlier. Adjusted operating income was $289.7 million, and the adjusted operating margin was 24.7%, up from 24.1% a year earlier and from 24.2% in the second quarter. The company attributed the adjusted-margin increase to favorable volume leverage and to price and productivity net of inflation and investment, inclusive of transactional foreign currency, which was positive on a dollar basis and a tailwind to the margin rate.

Americas revenue was $942.4 million, up 11.7% and 9.1% organically. Non-residential sales rose low-double digits organically, driven by volume growth and price realization. Residential sales rose mid-single digits organically, driven by price realization. Americas adjusted operating margin held at 30.1%. Acquisitions were a 40-basis point headwind to the region’s margin rate.

International revenue was $230.2 million, up 1.8% and down 0.2% organically. The company said the slight organic decline was driven by volume declines that more than offset favorable pricing. Reported International growth slowed from 16.2% in the second quarter as the acquisitions-and-divestitures contribution fell to 2.5% from 14.3%. International adjusted operating margin recovered to 13.9% from 12.4% in the second quarter. The company said the year-over-year 40-basis-point decline to 13.9% was driven by volume declines and unfavorable mix, offset partially by a PPII tailwind and favorable impacts from acquisitions.

Reported results included IEEPA tariff refunds that benefited operating income by $19.9 million and interest income by $0.9 million. Those items are excluded from adjusted operating income and adjusted EPS and reflect refunds received and expected from the U.S. government.

Interest expense was $24.2 million. Other income, net was $7.4 million and included a $4.1 million gain on non-operating investments and $0.9 million of interest income related to tariff refunds. The effective tax rate was 17.5%.

Year-to-date available cash flow for 2026 was $539.4 million. The company ended the quarter with cash and cash equivalents of $388.1 million and total debt of $2,032.0 million. In the third quarter it repurchased about 0.8 million shares for about $120 million and paid quarterly dividends of $0.55 a share, or about $46 million. It continues to expect full-year available cash flow to be 85% to 95% of adjusted net income.