Lennox International (LII) AI Stock Analysis

• Market Cap: $17.38B
• Dividend Yield: 0.96%
• Average Volume (3M): 453.68K
• Price to Earnings (P/E): 20.9
• Beta (1Y): 1.01
• Revenue Growth: 3.77%
• EPS Growth: 12.46%
• Country: US
• Employees: 14,200
• Sector: Industrials
• Sector Strength: 72
• Industry: Construction
• EPS (TTM): 6.98
• Shares Outstanding: 35,072,780
• 10 Day Avg. Volume: 467,878
• 30 Day Avg. Volume: 453,675
• PEG Ratio: 0.74
• Price to Book (P/B): 25.51
• Price to Sales (P/S): 4.06
• P/FCF Ratio: 27.73
• Enterprise Value/Market Cap: 1.15
• Enterprise Value/Revenue: 3.73
• Enterprise Value/Gross Profit: 11.20
• Enterprise Value/Ebitda: 16.66
• 1Y Price Target: $589.91
• Price Target Upside: 19.28% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12
• EPS Forecast (FY): 22.97
• Revenue Forecast (FY): $5.28B

• Rating: 64 Neutral
• Price Target: $478.00 ▼(-3.35% Downside)

Lennox International's overall stock score reflects a solid financial performance with strong profitability and effective equity utilization. However, high leverage and declining free cash flow growth pose risks. Technical indicators suggest bearish momentum, and valuation metrics indicate moderate pricing. The earnings call highlighted both achievements and challenges, with a cautious outlook for the near term but optimism for 2026.

Positive Factors

Segment Margin Strength

The record segment margin of 21.7% indicates strong operational efficiency and cost management, which can sustain profitability even in challenging market conditions.

Acquisition Strategy

Strategic acquisitions enhance market position and offer growth opportunities, potentially leading to increased revenue and profitability in the long term.

BCS Segment Growth

The BCS segment's margin expansion and revenue growth demonstrate strong market demand and effective strategic initiatives, supporting long-term business growth.

Negative Factors

Revenue Decline

A 5% revenue decline reflects market challenges and could impact future earnings if not addressed, highlighting the need for strategic adjustments.

High Leverage

High leverage can limit financial flexibility and increase risk, especially in volatile markets, potentially affecting long-term financial health.

Declining Free Cash Flow

A decline in free cash flow growth may constrain investment capacity and operational flexibility, posing risks to long-term growth and stability.

Lennox International Business Overview & Revenue Model

Company Description

Lennox International Inc. (LII) is a leading global provider of innovative climate control solutions for the heating, ventilation, air conditioning, and refrigeration (HVACR) markets. Headquartered in Richardson, Texas, the company operates through two primary segments: Residential Heating & Cooling and Commercial Heating & Cooling. Lennox designs, manufactures, and markets a wide range of products, including energy-efficient air conditioners, furnaces, and indoor air quality equipment. With a strong emphasis on sustainability and advanced technology, Lennox aims to enhance comfort and efficiency for both residential and commercial customers.

How the Company Makes Money

Lennox International generates revenue through the sale of a diverse array of HVACR products and services. The primary revenue streams include the sale of residential and commercial heating and cooling equipment, which encompasses air conditioners, furnaces, heat pumps, and related components. Additionally, the company offers aftermarket services and parts, which contribute significantly to its earnings by providing ongoing maintenance and support to customers. Strategic partnerships with contractors, distributors, and retailers enhance Lennox's market reach, allowing it to penetrate various geographical regions and customer segments. Furthermore, the company's investment in energy-efficient technologies and smart home solutions positions it well in a market increasingly focused on sustainability and innovation, driving customer demand and revenue growth.

Lennox International Financial Statement Overview

Summary

Lennox International demonstrates strong profitability with a consistent gross profit margin and improving net profit margin. However, the high debt-to-equity ratio and decline in free cash flow growth present potential risks.

Income Statement

Lennox International shows strong profitability with a consistent gross profit margin around 33% and a net profit margin improving to 15.7% in the TTM. Despite a slight revenue decline in the TTM, the company has demonstrated resilience with stable EBIT and EBITDA margins. The revenue growth rate has been volatile, indicating potential market challenges.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio of 1.13 in the TTM, indicating significant leverage, though improved from previous years. Return on equity is robust at 91.6%, showcasing effective use of equity. However, the equity ratio is low, suggesting reliance on debt financing, which could pose risks in volatile markets.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by 21.4% in the TTM, yet the company maintains a healthy free cash flow to net income ratio of 78.1%. The operating cash flow to net income ratio is moderate at 60.6%, indicating decent cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.35B	5.34B	4.98B	4.72B	4.19B	3.63B
Gross Profit	1.78B	1.77B	1.55B	1.28B	1.19B	1.04B
EBITDA	1.20B	1.13B	879.50M	733.50M	658.50M	547.50M
Net Income	841.40M	806.90M	590.10M	497.10M	464.00M	356.30M
Balance Sheet
Total Assets	3.52B	3.47B	2.80B	2.57B	2.17B	2.03B
Cash, Cash Equivalents and Short-Term Investments	59.20M	422.30M	69.10M	61.10M	36.50M	129.00M
Total Debt	1.21B	1.49B	1.53B	1.75B	1.44B	1.18B
Total Liabilities	2.45B	2.62B	2.51B	2.77B	2.44B	2.05B
Stockholders Equity	1.07B	850.20M	285.30M	-203.10M	-269.00M	-17.10M
Cash Flow
Free Cash Flow	534.30M	782.10M	486.00M	201.20M	408.70M	533.90M
Operating Cash Flow	684.10M	945.70M	736.20M	302.30M	515.50M	612.40M
Investing Cash Flow	-153.90M	-174.40M	-319.70M	-103.00M	-106.40M	-79.70M
Financing Cash Flow	-718.60M	-418.60M	-406.20M	-174.10M	-498.70M	-441.80M

Lennox International Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 494.55
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LII, the sentiment is Negative. The current price of 494.55 is below the 20-day moving average (MA) of 496.37, below the 50-day MA of 494.98, and below the 200-day MA of 550.13, indicating a neutral trend. The MACD of 1.24 indicates Positive momentum. The RSI at 50.29 is Neutral, neither overbought nor oversold. The STOCH value of 23.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LII.

Lennox International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TT	70 Outperform	$86.45B	30.30	37.07%	0.95%	8.58%	20.37%
JCI	70 Outperform	$73.31B	44.24	11.86%	1.27%	-10.19%	100.65%
CARR	66 Neutral	$44.81B	21.41	9.44%	1.65%	-7.93%	-35.00%
LII	64 Neutral	$17.38B	20.87	92.25%	0.96%	3.77%	12.46%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
MAS	53 Neutral	$13.35B	16.41	―	1.94%	-3.62%	3.41%
OC	52 Neutral	$9.32B	-19.64	-3.27%	2.43%	3.47%	-148.53%

Lennox International Corporate Events

Lennox International Updates Executive Compensation Agreement

On December 4, 2025, Lennox International‘s Compensation and Human Resources Committee approved a new Long-Term Incentive Award Agreement for U.S. employees at the Vice President level and above. This agreement, part of the 2019 Equity and Incentive Compensation Plan, introduces updates to restrictive covenant provisions and administrative changes, impacting executive compensation through restricted stock units, performance share units, and stock appreciation rights.