William Blair analyst Ryan Merkel has maintained their bullish stance on LII stock, giving a Buy rating on August 16.
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Ryan Merkel has given his Buy rating due to a combination of factors surrounding Lennox International’s recent strategic acquisition. The company announced the purchase of NSI Industries’ HVAC assets, Duro Dyne and Supco, for $550 million, which is anticipated to enhance revenue by $225 million and EBITDA by $55 million. This acquisition is expected to contribute approximately $0.35 to earnings per share by 2026.
Merkel views this acquisition as a strategic move that aligns with Lennox’s goals to bolster its distribution service levels and improve margins. The brands Duro Dyne and Supco are well-regarded in the HVAC industry, and their integration is seen as an opportunity for Lennox to expand its parts and supplies offerings. This expansion is likely to increase customer retention and attract new clients, thereby enhancing Lennox’s market position. The acquisition price is considered fair, given the established nature of the brands and their potential to accelerate growth in the parts and supplies sector.
In another report released on August 16, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a $679.00 price target.
Based on the recent corporate insider activity of 84 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of LII in relation to earlier this year.