Is Allegion Plc overvalued or undervalued?

As of 18 February 2025, Allegion Plc's valuation grade has moved from expensive to fair, indicating a shift in its market perception. The company is currently fairly valued, with a P/E ratio of 19, an EV to EBITDA of 14.65, and a PEG ratio of 1.59. Notably, its ROCE stands at an impressive 25.59%, while the ROE is even higher at 38.70%, reflecting strong operational efficiency and profitability.
In comparison to its peers, Allegion's P/E ratio is more favorable than Watsco, Inc., which is considered very expensive with a P/E of 32.52, while Masco Corp. is deemed risky with a P/E of 15.28. Additionally, Allegion's EV to EBITDA ratio of 14.65 is competitive against A. O. Smith Corp.'s 14.99. The company's recent stock performance has outpaced the S&P 500, with a 1-year return of 22.56% compared to the S&P 500's 10.26%, further supporting the conclusion that Allegion is fairly valued in the current market environment.