Lincoln Electric Holdings (LECO) is back in focus after the Board approved a 10% increase in the quarterly dividend to US$0.87 per share, which corresponds to an annualized rate of US$3.48.
Set against a share price of US$259.19, Lincoln Electric Holdings has seen its share price return ease slightly in the last day and week. The 90 day share price return of 4.08% and 1 year total shareholder return of 9.61% suggest momentum has cooled but not disappeared.
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Lincoln Electric Holdings now trades below the average analyst target and at a steeper discount to some intrinsic value estimates. This raises the question of where a fair price really sits after this dividend move and recent share performance.
Most Popular Narrative: 15% Undervalued
Against the last close at $259.19, the most followed narrative for Lincoln Electric Holdings points to a fair value of about $304.91, which implies a meaningful gap between market price and that valuation anchor.
The current valuation implies the market is not fully pricing in the company’s long term targets for higher automation growth, structurally higher margins, and ongoing buybacks and dividends. This supports the view that Lincoln Electric Holdings is undervalued.
See why 5 investors see Lincoln Electric Holdings as 15% undervalued.
Result: Fair Value of $304.91 (UNDERVALUED)
Still, the Lincoln Electric Holdings story can unravel if price increases fail to keep up with input costs or if weak automotive demand drags on automation orders.
Find out about the key risks to this Lincoln Electric Holdings narrative.
Next Steps
Mixed signals on Lincoln Electric Holdings so far. If you want to move fast and rely on your own judgment, start with the 3 key rewards and 1 important warning sign.
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