Value
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.0 |
| P/S | 8.2 |
| EV/EBITDA | 1.6 |
| Fwd P/E | 6.3 |
| PEG | 4.8 |
| Analyst target | 5.0 |
- ▸Forward P/E: 20.4x
- ▸PEG: 1.67
LECO · Why this verdict
Why Lincoln Electric Holdings (LECO) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictBUY WAIT
Overall score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Lincoln Electric is a financially sound industrial franchise — with a 38% return on equity, a Piotroski F-Score of 8 out of 9, and four straight earnings beats — but with the stock now trading above its price target and free cash flow converting at only 33% of stated earnings, the margin of safety for new entry has largely been consumed.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Trading above all major moving averages following a golden cross, with a bullish MACD and rising on-balance volume, the stock exhibits consistent demand-driven price action that typically reflects genuine institutional interest. Momentum breakdown | Stock maintains its position above the 200-day moving average and RSI holds above 50 for the next six months without a death cross reversal. | ↑Improving |
| CounterWith the stock trading above its calculated price target, the breakout is occurring into thin upside headroom — continuation requires analyst targets to be revised higher, which depends on future earnings delivery rather than current momentum alone. | ||
The company has beaten consensus estimates in each of the last four quarters, beginning with a 12% positive surprise in the oldest quarter of the streak followed by three more recent modest beats, reflecting a disciplined pattern of consistent execution above initial guidance. Earnings | The beat streak continues for at least 3 of the next 4 quarters, with average EPS surprise staying above 2%. | ↓Deteriorating |
| CounterThe three most recent beats have been narrow — ranging from 2% to 4% — suggesting the earnings trajectory may be maturing and that the pattern of consistent but thin outperformance offers diminishing lift to the stock price over time. | ||
A return on equity of 38% alongside a Piotroski F-Score of 8 out of 9 mark the company as a financially sound franchise, with assets deployed efficiently and balance sheet health well above sector average. Quality breakdown | Return on equity stays above 25% and Piotroski F-Score remains at 7 or higher for the next four quarters. | →Stable |
| CounterFree cash flow is converting at only 33% of net income — flagged as a quality red flag — meaning the earnings reported on the income statement are not being realized in cash at the same rate, which can limit actual capital available for dividends, buybacks, or reinvestment. | ||
The stock now trades above its price target, leaving the reward-to-risk geometry unfavorable and no material near-term headroom to the analyst consensus — making the case for new entry difficult to justify at current levels. Bear case | Consensus analyst price targets are revised above $295 — more than 10% above the current price of $267.86 — within 12 months, restoring a geometry that supports entry. | ↑Improving |
| CounterA high-quality franchise with an 8 out of 9 Piotroski score and a 38% return on equity may warrant a premium to prior analyst targets; if the earnings beat streak continues and estimates are revised upward, the current price could become a new fair-value floor rather than a ceiling. | ||
Trading above all major moving averages following a golden cross, with a bullish MACD and rising on-balance volume, the stock exhibits consistent demand-driven price action that typically reflects genuine institutional interest.
↑ImprovingMomentum breakdown
- Expectation
- Stock maintains its position above the 200-day moving average and RSI holds above 50 for the next six months without a death cross reversal.
CounterWith the stock trading above its calculated price target, the breakout is occurring into thin upside headroom — continuation requires analyst targets to be revised higher, which depends on future earnings delivery rather than current momentum alone.
The company has beaten consensus estimates in each of the last four quarters, beginning with a 12% positive surprise in the oldest quarter of the streak followed by three more recent modest beats, reflecting a disciplined pattern of consistent execution above initial guidance.
↓DeterioratingEarnings
- Expectation
- The beat streak continues for at least 3 of the next 4 quarters, with average EPS surprise staying above 2%.
CounterThe three most recent beats have been narrow — ranging from 2% to 4% — suggesting the earnings trajectory may be maturing and that the pattern of consistent but thin outperformance offers diminishing lift to the stock price over time.
A return on equity of 38% alongside a Piotroski F-Score of 8 out of 9 mark the company as a financially sound franchise, with assets deployed efficiently and balance sheet health well above sector average.
→StableQuality breakdown
- Expectation
- Return on equity stays above 25% and Piotroski F-Score remains at 7 or higher for the next four quarters.
CounterFree cash flow is converting at only 33% of net income — flagged as a quality red flag — meaning the earnings reported on the income statement are not being realized in cash at the same rate, which can limit actual capital available for dividends, buybacks, or reinvestment.
The stock now trades above its price target, leaving the reward-to-risk geometry unfavorable and no material near-term headroom to the analyst consensus — making the case for new entry difficult to justify at current levels.
↑ImprovingBear case
- Expectation
- Consensus analyst price targets are revised above $295 — more than 10% above the current price of $267.86 — within 12 months, restoring a geometry that supports entry.
CounterA high-quality franchise with an 8 out of 9 Piotroski score and a 38% return on equity may warrant a premium to prior analyst targets; if the earnings beat streak continues and estimates are revised upward, the current price could become a new fair-value floor rather than a ceiling.
Per-dimension breakdown
Quality
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 8.2 |
| Gross margin | 3.2 |
| Op margin | 6.9 |
| Net margin | 6.2 |
| Current ratio | 6.5 |
| FCF quality | 2.6 |
| Moat | 6.8 |
| Piotroski F | 8.9 |
- ▸Excellent ROE: 38%
- ▸Earnings quality RED FLAG: 33% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
5.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.4 |
| EPS growth | 5.5 |
Momentum
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 2.2 |
| Volume | 7.3 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA but MA still rising (+1.4%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.0 |
| Analyst rating | 7.0 |
| Price target | 7.6 |
- ▸LLM news sentiment: +0.40 (n=1)
- ▸Light analyst coverage (10.0) — signal dampened
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.4 |
| quality rank | 7.5 |
| growth rank | 6.3 |
- ▸Superior ROE vs peers
Technical
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.6 |
| support resistance | 8.5 |
| 52w position | 6.2 |
| gap | 5.0 |
Risk (lower is worse)
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.4 |
| days to cover | 6.8 |
| volatility | 5.1 |
| beta | 6.2 |
| debt equity | 5.6 |
Catalyst
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.2 |
| dividend safety | 5.2 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 9 days
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier +2 (HOLD_IF_HOLDING → STRONG_BUY_WAIT).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=+2|ENTRY_STICKY:WITHIN_BANDPassed (6)
- MOMENTUM:4.6>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.40
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.6<1.5@spot
Warning (2)
- MOMENTUM:4.6<5.5 (soft — BUY_NOW allowed but watch)
- EARNINGS_PROXIMITY:9d<=14d (soft)
Reward-to-Risk
0.64
Upside
+3.8%
Downside
5.9%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 9d with 4/4 beat streak
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:4.6>=4.5. Top dim: Insider at 7.3; weakest: Peer rank at 4.5. No conviction either direction.
The strongest dimensions are Insider at 7.3, Sentiment at 7.2, and Technical at 6.8; the weakest are Peer rank at 4.5, Momentum at 4.6, and Value at 5.2. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 0.64 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Price Momentum Breakout
Trip ifStock falls below the 200-day moving average for more than 10 consecutive trading days.
- P2Consistent Earnings Outperformance
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P3High Quality Business Fundamentals
Trip ifReturn on equity falls below 25% for 2 consecutive quarters.
- P4Price Above Target Limits Upside
Trip ifConsensus analyst price target is revised above $295 — more than 10% above the current price of $267.86 — within 12 months.