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1. Company Snapshot

1.a. Company Description

Lincoln Electric Holdings, Inc., through its subsidiaries, designs, develops, manufactures, and sells welding, cutting, and brazing products worldwide.The company operates through three segments: Americas Welding, International Welding, and The Harris Products Group.It offers welding products, including arc welding power sources, plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes and welding accessories, and specialty welding consumables and fabrication products.


The company's product offering also includes computer numeric controlled plasma and oxy-fuel cutting systems, and regulators and torches used in oxy-fuel welding, cutting, and brazing; and consumables used in the brazing and soldering alloys market.In addition, it is involved in the retail business in the United States.Further, the company manufactures copper and aluminum headers, distributor assemblies, and manifolds for the heating, ventilation, and air conditioning sector in the United States and Mexico.


The company serves general fabrication, energy and process, automotive and transportation, and construction and infrastructure industries, as well as heavy fabrication, ship building, and maintenance and repair markets.It sells its products directly to users of welding products, as well as through industrial distributors, retailers, and agents.The company was founded in 1895 and is headquartered in Cleveland, Ohio.

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1.b. Last Insights on LECO

Lincoln Electric Holdings, Inc.'s recent performance was positively driven by its Q2 2025 earnings beat, with adjusted earnings per share of $2.6, exceeding the Zacks Consensus Estimate of $2.32. The company's cash-generative business model, posting ~$0.10-$0.14 in FCF underneath every $1 of revenue, supports its long-term growth prospects. A Zacks Rank #1 (Strong Buy) upgrade and rising earnings estimates also contributed to the positive momentum. Additionally, the company's disciplined capital allocation, focusing on shareholder yield and small acquisitions, enhances its appeal to investors.

1.c. Company Highlights

2. Lincoln Electric's Q3 Earnings: Strong Performance Amidst Challenges

Lincoln Electric reported a strong third quarter, with sales increasing 7.9% to $1.061 billion, driven by a 7.8% higher price, 1.7% benefit from acquisitions, and 60 basis points from favorable foreign exchange translation. Gross profit dollars increased approximately 11% to $389 million, and gross profit margin expanded 90 basis points to 36.7%. The company's earnings per share (EPS) came in at $2.47, beating estimates of $2.39. The results demonstrate the company's ability to offset inflation and volume headwinds through commercial and operational agility.

Publication Date: Nov -02

📋 Highlights
  • Q3 Sales Growth:: Sales rose 7.9% to $1.061 billion, driven by 7.8% pricing, 1.7% M&A, and FX benefits.
  • Gross Profit Expansion:: Gross profit hit $389M (+11%), with margin up 90 bps to 36.7%.
  • Organic Sales Resilience:: Stabilized demand in Americas and Harris segments offset automation volume declines (+5.6% organic growth).
  • Record Cash Flow:: YTD cash flow up 13% with 119% cash conversion ratio and $102M operating cash flow in Q3.
  • Dividend Raise:: 30th consecutive increase at 5.3%, reflecting strong financial positioning and confidence in long-term growth.

Segment Performance

The Americas Welding and Harris Products Group segments drove the growth, with resilient demand for short-cycle products. The Automation portfolio continues to be challenged due to deferred capital spending, but order rates increased in late September and October. Gabriel Bruno mentioned that the company is seeing broad-based acceleration in order flow, not just in the automotive sector, but also in other sectors, attributed to the introduction of high-quality solutions within automation capabilities.

Cash Flow and Return on Invested Capital

The company generated record cash flow from operations in the quarter, aided by lower tax payments. Year-to-date cash flows have increased approximately 13% with a 119% cash conversion ratio. Adjusted return on invested capital increased to 22.2%, demonstrating the company's ability to generate strong returns on its investments.

Outlook and Valuation

The company expects traditional seasonality in sales performance as it moves from the third quarter to the fourth quarter with a modest sequential improvement in operating income margin. Analysts estimate next year's revenue growth at 5.9%. With a P/E Ratio of 24.83 and an EV/EBITDA of 18.78, the stock appears to be reasonably valued. The company's ROIC of 19.44% and ROE of 38.43% are also impressive, indicating a strong ability to generate returns for shareholders.

Dividend and Shareholder Returns

The company announced its 30th consecutive annual dividend payout rate increase, which is 5.3% starting early next year. The Dividend Yield is 1.28%, providing a relatively stable source of return for shareholders. The Free Cash Flow Yield is 4.23%, indicating a healthy ability to generate cash for shareholders.

3. NewsRoom

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Franklin Resources Inc. Reduces Stock Holdings in Lincoln Electric Holdings, Inc. $LECO

Dec -01

Source: defenseworld.net

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BLI Banque de Luxembourg Investments Has $4.50 Million Position in Lincoln Electric Holdings, Inc. $LECO

Dec -01

Source: defenseworld.net

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682,428 Shares in Lincoln Electric Holdings, Inc. $LECO Acquired by Boston Partners

Nov -27

Source: defenseworld.net

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Lincoln Electric Holdings, Inc. $LECO Stock Holdings Reduced by Creative Planning

Nov -24

Source: defenseworld.net

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ABN Amro Investment Solutions Acquires New Shares in Lincoln Electric Holdings, Inc. $LECO

Nov -14

Source: defenseworld.net

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Buy 5 Stocks With Extensive Robotics Application for the Rest of 2025

Nov -04

Source: zacks.com

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ADP, Snap-on Lead 14 Companies To Announce Annual Increases In First Half Of November

Nov -02

Source: seekingalpha.com

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Lincoln Electric (LECO) Beats Earnings With Record Cash Flow But Revenue Growth Slows to 5.6%

Oct -30

Source: 247wallst.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.61%)

6. Segments

Americas Welding

Expected Growth: 4.65%

Americas Welding from Lincoln Electric Holdings, Inc. growth of 4.65% driven by increasing demand for welding products in construction, automotive, and energy industries, coupled with the company's strategic acquisitions, product innovation, and expansion into emerging markets.

International Welding

Expected Growth: 8.5%

International Welding's 8.5% growth is driven by increasing demand for automation and robotics in manufacturing, infrastructure development, and energy projects. Additionally, Lincoln Electric's strategic acquisitions, expansion in emerging markets, and innovative product offerings have contributed to the segment's growth.

The Harris Products Group

Expected Growth: 4.65%

The Harris Products Group's 4.65% growth is driven by increasing demand for welding consumables and equipment in the construction and manufacturing industries, as well as the company's strategic acquisitions and expansion into emerging markets, such as Asia and Latin America.

7. Detailed Products

Welding Equipment

Lincoln Electric offers a wide range of welding equipment, including MIG, TIG, ARC, and flux cored welding machines, as well as welding accessories and consumables.

Cutting Equipment

Lincoln Electric provides a variety of cutting equipment, including plasma cutting systems, oxy-fuel cutting equipment, and CNC cutting machines.

Additive Welding Solutions

Lincoln Electric offers additive welding solutions, including 3D printing and welding technologies, for the production of complex parts and components.

Automation Solutions

Lincoln Electric provides automation solutions, including robotic welding cells and automated welding systems, for increased efficiency and productivity.

Welding Consumables

Lincoln Electric offers a wide range of welding consumables, including electrodes, wires, and fluxes, for various welding processes.

Welding Safety Equipment

Lincoln Electric provides welding safety equipment, including helmets, gloves, and protective clothing, for welders and welding operators.

8. Lincoln Electric Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Lincoln Electric Holdings, Inc. is medium due to the availability of alternative welding products and services from competitors.

Bargaining Power Of Customers

The bargaining power of customers for Lincoln Electric Holdings, Inc. is low due to the company's strong brand reputation and customer loyalty.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Lincoln Electric Holdings, Inc. is medium due to the company's dependence on a few key suppliers for raw materials.

Threat Of New Entrants

The threat of new entrants for Lincoln Electric Holdings, Inc. is low due to the high barriers to entry in the welding industry, including significant capital investments and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for Lincoln Electric Holdings, Inc. is high due to the competitive nature of the welding industry, with several established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 46.07%
Debt Cost 5.55%
Equity Weight 53.93%
Equity Cost 10.14%
WACC 8.03%
Leverage 85.44%

11. Quality Control: Lincoln Electric Holdings, Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Snap-on

A-Score: 6.8/10

Value: 3.9

Growth: 6.0

Quality: 8.1

Yield: 6.0

Momentum: 7.5

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Lincoln Electric

A-Score: 5.4/10

Value: 2.4

Growth: 6.4

Quality: 6.3

Yield: 2.0

Momentum: 7.5

Volatility: 7.7

1-Year Total Return ->

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RBC Bearings

A-Score: 5.3/10

Value: 0.8

Growth: 7.4

Quality: 6.8

Yield: 0.0

Momentum: 8.5

Volatility: 8.3

1-Year Total Return ->

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Toro

A-Score: 5.1/10

Value: 4.1

Growth: 6.1

Quality: 5.8

Yield: 3.0

Momentum: 3.5

Volatility: 8.0

1-Year Total Return ->

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Timken

A-Score: 4.9/10

Value: 5.4

Growth: 5.1

Quality: 4.6

Yield: 4.0

Momentum: 3.5

Volatility: 7.0

1-Year Total Return ->

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Stanley Black & Decker

A-Score: 4.2/10

Value: 4.9

Growth: 3.1

Quality: 3.9

Yield: 7.0

Momentum: 1.0

Volatility: 5.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

245.41$

Current Price

245.41$

Potential

-0.00%

Expected Cash-Flows