Legrand (LR.PA) Riding the Wave to a Resurgence of New Energy-Efficient Buildings

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Legrand
Ticker: LR.PA
Price: EUR 63.48
Recommendation: Buy

Legrand Outlook

As a global specialist in products and systems for electrical and digital building infrastructures, Legrand offers green building solutions and provides both training and tailored support to investors, project managers and installers alike.

Legrand’s responsibility is to limit the impact of its activities on the environment, and to be a benchmark player in the onset of a low carbon society. This responsibility concerns both the Group’s sites and the life cycle of products, from their design to the end of their life.

The challenge is to innovate to reduce the environmental footprint of Legrand’s activities, particularly by favouring the implementation of a circular economy.

To reduce the environmental impact of its products, Legrand incorporates the circular economy principles into the development of its new products. This eco-design initiative concerns all the stages of the product life cycle.

Reducing the environmental impact of buildings also involves design choices. Informing users about the environmental impact of the products they use is therefore a top priority. Developed in France on Legrand’s initiative, the PEP ecopassport has become the reference tool for measuring the environmental impact of building equipment. In addition, Legrand works towards limiting its production of industrial waste, and towards reducing its negative external consequences by fostering recovery schemes.

Legrand’s eco-design approach aims to reduce the environmental impact of its products from design to end of life, mainly through the choice of raw materials and optimised logistics.

The Group also works to improve the processing of waste related to its industrial activities, and tracks the result of its actions by measuring the waste recycling rate. As early as 2004, Legrand even anticipated the elimination of all the substances listed in the RoHS (Restriction of Hazardous Substances) 2002/95/EC directive, including those contained in devices to which it does not apply.

The Group aimed to extend the application of the directive to all products it markets all over the world. Moreover, those of the Group’s subsidiaries affected by regulations relating to materials originating in conflict zones (conflict minerals) have set up processes for questioning their suppliers to make sure that no such materials form part of products marketed by these subsidiaries.

Finally, Legrand works towards the retrieval and recycling of products at end of life, for the Group and the subsidiary.

Business Summary

Legrand SA, formerly Legrand SNC, is a France-based company that specializes in the design, manufacture and distribution of products and systems for electrical installations and information networks.

Its activity is organized around four product families: products for monitoring and controlling electrical energy, including switches, electrical connectors, thermostats, dimmers, burglar alarms, smoke detectors, audio and video connectors; energy distribution products, including circuit breakers, electrical boxes, electrical cabinets; cable management systems, including channels, mouldings, conduits, floor boxes, and structured wiring systems (voice-data-image), including wall sockets for high-speed transmission, optical fiber and copper splitters and connection panels used in telephone and computer networks.

It operates through Solarfective and OCL1, the specialist in architectural lighting solutions and Afco System. Legrand operates worldwide.

Price Performance

Relative Valuation

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 67.48.

The projected upper bound is: 66.67.

The projected lower bound is: 60.03.

The projected closing price is: 63.35.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 11.3760. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 16 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 30.96. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 24 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -138.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 5 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 9 period(s) ago.

Rex Takasugi – TD Profile

LEGRAND closed up 0.080 at 63.480. Volume was 41% above average (neutral) and Bollinger Bands were 61% wider than normal.

Open     High    Low     Close     Volume
62.620   63.720  62.600  63.480    630,921
Technical Outlook
Short Term:        Oversold
Intermediate Term: Bearish
Long Term:         Bearish
Moving Averages: 10-period    50-period    200-period
Close:           66.70        68.93        66.17
Volatility:      29           31           50
Volume:          498,032      448,219      602,350

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

LEGRAND is currently 4.1% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of LEGD.PA (mildly bearish). Our trend forecasting oscillators are currently bearish on LEGD.PA and have had this outlook for the last 4 periods.

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