Legrand Earnings: Pricing Power Drives Record Operating Margin

Narrow-moat Legrand delivered a record operating margin of 21%, evidence of its strong pricing power, despite declining demand from its residential and commercial buildings end markets. Organic sales grew 2.7% during fiscal 2023, in line with company-compiled consensus of 3.0%. Full-year 2024 guidance of sales growth in the low single digits (including acquisitions) and an adjusted operating margin of between 20.0% and 20.8% is consistent with our forecasts. Shares are currently trading slightly above our EUR 87 fair value estimate, which we maintain.