Is It Too Late To Consider Lincoln Electric Holdings (LECO) After Strong Multi‑Year Share Gains?

• If you are looking at Lincoln Electric Holdings and wondering whether the current share price still offers value, you are not alone. A closer look at how it is priced can be helpful before you make any big decisions.
• The stock last closed at US$284.98, with returns of 10.2% over 30 days, 16.9% year to date, 39.1% over 1 year, 77.0% over 3 years, and 157.2% over 5 years. This naturally raises questions about how much of the story is already reflected in the price.
• Recent news around Lincoln Electric has kept attention on the company, as investors look at how it is positioned within the wider capital goods space and what that might mean for future opportunities and risks. This context is important when you weigh those past returns against how the market could be thinking about the business today.
• Our valuation model currently gives Lincoln Electric a score of 1 out of 6, meaning it screens as undervalued on only one of six checks. Next we will compare different valuation approaches and then finish with a way to look beyond the numbers for a fuller view of value.

Lincoln Electric Holdings scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Lincoln Electric Holdings Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model takes estimates of a company’s future cash flows and then discounts them back to today’s dollars to arrive at an estimate of what the business might be worth per share.

For Lincoln Electric Holdings, the model uses last twelve month Free Cash Flow of about $547.3 million and projects Free Cash Flow out to 2035 using a 2 Stage Free Cash Flow to Equity approach. Analyst estimates cover the next several years, with projected Free Cash Flow such as $575.3 million in 2026 and $953 million in 2030, and Simply Wall St then extends those projections further using its own assumptions.

When all those projected cash flows, including the 10-year path from 2026 to 2035, are discounted back to today and divided by the share count, the model arrives at an estimated intrinsic value of about $310.53 per share. Compared with the recent share price of $284.98, this suggests the stock appears about 8.2% undervalued on this method, which is a relatively small gap.

Result: ABOUT RIGHT

Lincoln Electric Holdings is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Lincoln Electric Holdings.

Approach 2: Lincoln Electric Holdings Price vs Earnings

For a profitable company, the P/E ratio is a useful way to think about what you are paying for each dollar of earnings, because it links the share price directly to the business’s current profit stream.

What counts as a “normal” or “fair” P/E depends on how quickly earnings are expected to grow and how risky those earnings are. Higher expected growth or lower perceived risk can support a higher P/E, while slower growth or higher risk usually points to a lower one.

Lincoln Electric Holdings currently trades on a P/E of about 30.13x. That sits slightly above the Machinery industry average of 29.73x and is close to the peer average of 29.76x. Simply Wall St also calculates a proprietary “Fair Ratio” of 26.18x for Lincoln Electric, which is the P/E it might typically trade on given factors such as earnings growth, profit margins, industry, market cap and risk profile.

The Fair Ratio can be more informative than a simple peer or industry comparison, because it adjusts for company specific characteristics rather than assuming every business deserves the same multiple. Against this Fair Ratio, Lincoln Electric’s current P/E screens higher, which points to the shares looking overvalued on this measure.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Lincoln Electric Holdings Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. These are simple stories that you and other investors build around Lincoln Electric Holdings by linking a view on its future revenue, earnings and margins to a forecast and then to a fair value, all within Simply Wall St’s Community page where millions of investors share views.

With Narratives, you can compare that fair value to the current share price to decide whether Lincoln Electric looks expensive or cheap to you. Your story then updates automatically as new information like earnings or news comes in, so your view stays current without you having to rebuild the numbers from scratch.

For example, one bearish Narrative currently ties a fair value of about US$224 and a lowest analyst target of US$189 to more conservative assumptions. A bullish Narrative supports a fair value of about US$290 with faster growth and a higher future P/E. Your job is to decide which story feels closer to how you see the company, or whether you want to create your own.

For Lincoln Electric Holdings we will make it really easy for you with previews of two leading Lincoln Electric Holdings Narratives:

These are not predictions, they are structured viewpoints that tie together assumptions on growth, margins, risks, and what a fair value might look like under different conditions. Your job is to decide which set of assumptions feels closer to how you see the business, or whether you prefer to create your own version.

🐂 Lincoln Electric Holdings Bull Case

Fair value: US$290.00

Implied undervaluation versus last close: about 1.7%

Assumed annual revenue growth: 6.16%

• Assumes automation demand, infrastructure spending, and a shortage of skilled welders support faster margin expansion and higher earnings than consensus.
• Builds in rising exposure to higher margin automation and robotics, plus growth in emerging markets and broader channel reach, as key supports for future earnings per share.
• Anchors on the highest analyst price target of US$290.00 and uses higher future P/E expectations, so you would need to be comfortable with stronger growth and profitability than more cautious views assume.

🐻 Lincoln Electric Holdings Bear Case

Fair value: US$262.60

Implied overvaluation versus last close: about 8.5%

Assumed annual revenue growth: 6.03%

• Assumes automation, reshoring, and infrastructure themes support growth, but with more moderate upside and a lower future P/E multiple than today.
• Highlights risks around reliance on price increases, exposure to cyclical end markets, and softer trends in some international regions as potential constraints on long term earnings stability.
• Is built around an analyst consensus style fair value of about US$262.60, suggesting the recent share price sits above what this narrative considers a reasonable level.

If you want to go beyond these snapshots and see how other investors are connecting the same data to different stories and fair values, Curious how numbers become stories that shape markets? Explore Community Narratives can be a helpful next step before you decide what Lincoln Electric is worth to you.

Do you think there's more to the story for Lincoln Electric Holdings? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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