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Lincoln Electric Holdings Inc LECO

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Lincoln Electric Ends 2020 With Solid Fourth Quarter; Raising FVE

Analyst Note

| Krzysztof Smalec, CFA |

Narrow-moat-rated Lincoln Electric ended 2020 in strong fashion, as its fourth-quarter adjusted EPS of $1.24 easily beat the FactSet consensus estimate of $1.06. Despite a 5.8% year-over-year net sales decline, Lincoln Electric increased its fourth-quarter adjusted EPS 7.8% from the prior-year period thanks to 100-basis-points of operating margin expansion. After rolling our model forward one year, we are raising our fair value estimate for Lincoln Electric to $107 from $94, which reflects the firm’s solid execution, an improving end market outlook, and time value of money.

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Company Profile

Business Description

Lincoln Electric is a leading manufacturer of welding, cutting, and brazing products. The firm’s portfolio of products includes arc-welding solutions, plasma and oxy-fuel cutting systems, and brazing and soldering alloys, as well as automation solutions. Lincoln Electric serves clients in the general fabrication, heavy industries, automotive, construction, shipbuilding, energy and process industries, among other end markets. Based in Cleveland, Ohio, Lincoln Electric has operations in 19 countries and has 11,000 employees worldwide. The company generated roughly $2.7 billion in sales and $328 million in adjusted operating income in 2020.

Contact
22801 St. Clair Avenue
Cleveland, OH, 44117
T +1 216 481-8100
Sector Industrials
Industry Tools & Accessories
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 10,700