Lennox International (LII) AI Stock Analysis

• Market Cap: $19.70B
• Dividend Yield: 0.83%
• Average Volume (3M): 365.27K
• Price to Earnings (P/E): 24.7
• Beta (1Y): 1.01
• Revenue Growth: 7.78%
• EPS Growth: 30.10%
• Country: US
• Employees: 14,200
• Sector: Industrials
• Sector Strength: 90
• Industry: Construction
• EPS (TTM): 3.37
• Shares Outstanding: 35,484,830
• 10 Day Avg. Volume: 399,546
• 30 Day Avg. Volume: 365,273
• PEG Ratio: 1.48
• Price to Book (P/B): -42.05
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 42.45
• Enterprise Value/Market Cap: 0.52
• Enterprise Value/Revenue: 0.49
• Enterprise Value/Gross Profit: 5.82
• Enterprise Value/Ebitda: 2.42
• 1Y Price Target: $576.80
• Price Target Upside: 4.83% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12

• Rating: 74 Outperform
• Price Target: $635.00 ▲(15.41%Upside)

Lennox International scores a 74, driven by strong financial performance and strategic initiatives that support growth. However, technical signals and valuation suggest caution. Earnings call details highlight both progress and challenges, which moderate the overall score.

Positive Factors

Industry Shipments

Industry residential shipments were up 12% year-over-year through February, showing strong performance with no signs of pre-buy headwinds.

Joint Venture

Lennox announced a joint venture with Ariston Group to sell residential water heaters by leveraging the Lennox brand and distribution.

Residential Segment Performance

Residential results impressed, with 7% price/mix and share gains.

Negative Factors

Commercial Segment Performance

Shares are down 9% as commercial segment revenue and profits missed expectations.

Demand Headwinds

The industry is facing potential demand headwinds in 2026 and beyond, as it has already pulled forward more than 4 million units of demand over the last five years.

Price Target Reduction

Analysts remain underweight on Lennox International and are lowering the price target to $450 due to continued concerns about organic downside in 2025.

Lennox International Business Overview & Revenue Model

Company Description

Lennox International Inc., together with its subsidiaries, designs, manufactures, and markets a range of products for the heating, ventilation, air conditioning, and refrigeration markets in the United States, Canada, and internationally. It operates through three segments: Residential Heating & Cooling, Commercial Heating & Cooling, and Refrigeration. The Residential Heating & Cooling segment provides furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment and accessories, comfort control products, and replacement parts and supplies for residential replacement and new construction markets. The Commercial Heating & Cooling segment offers unitary heating and air conditioning equipment, applied systems, controls, installation and service of commercial heating and cooling equipment, and variable refrigerant flow commercial products for light commercial markets. The Refrigeration segment offers condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, and refrigeration rack systems for preserving food and other perishables in supermarkets, convenience stores, restaurants, warehouses, and distribution centers, as well as for data centers, machine tooling, and other cooling applications; and compressor racks and industrial process chillers. The company sells its products and services through direct sales, distributors, and company-owned parts and supplies stores. Lennox International Inc. was founded in 1895 and is headquartered in Richardson, Texas.

How the Company Makes Money

Lennox International makes money primarily through the sale of HVACR products and services. The Residential Heating & Cooling segment generates revenue by selling HVAC systems and related components to homeowners, often through a network of dealers and distributors. The Commercial Heating & Cooling segment focuses on providing HVAC solutions to businesses, including packaged rooftop units, split systems, and advanced control systems. The Refrigeration segment offers refrigeration products for the food, beverage, and medical industries, contributing to the company's revenue. Additionally, Lennox International benefits from service contracts, maintenance plans, and sales of replacement parts, which provide a steady source of recurring income. The company's earnings are further supported by its focus on innovation, energy efficiency, and strong relationships with suppliers and distributors.

Lennox International Financial Statement Overview

Summary

Lennox International demonstrates robust financial health with strong revenue growth, improved profitability, and efficient cash management. However, the balance sheet reflects past equity challenges requiring cautious leverage management.

Income Statement

Lennox International shows strong and consistent growth in revenue with a notable increase of 13.78% from 2023 to 2024 and 8.6% from 2022 to 2023. The company maintains healthy gross profit margins at 32.8% in TTM, driven by efficient operations. Net profit margins improved to 14.96% in TTM, reflecting enhanced profitability. EBIT and EBITDA margins are robust at 19.06% and 19.87% respectively, indicating strong operational efficiency.

Balance Sheet

The company's debt-to-equity ratio of 1.75 in TTM is moderate, suggesting manageable leverage, though equity is relatively low compared to assets, with an equity ratio of 24.67%. Return on equity is impressive at 94.19% due to efficient earnings generation. However, the negative stockholders' equity in previous years indicates past financial challenges.

Cash Flow

Lennox International's free cash flow growth is strong with a 59.12% increase from 2022 to 2023, showcasing effective cash management. The operating cash flow to net income ratio of 1.16 indicates solid cash generation relative to earnings. The free cash flow to net income ratio of 0.96 suggests nearly all earnings are being converted to free cash flow.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
5.37B	5.34B	4.98B	4.72B	4.19B	3.63B
	Gross Profit
1.76B	1.77B	1.55B	1.28B	1.19B	1.04B
	EBIT
1.02B	1.03B	790.10M	656.20M	590.30M	478.50M
	EBITDA
1.07B	1.13B	879.50M	729.00M	652.50M	553.90M
	Net Income Common Stockholders
802.90M	806.90M	590.10M	497.10M	464.00M	356.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
222.90M	422.30M	69.10M	61.10M	36.50M	129.00M
	Total Assets
3.46B	3.47B	2.80B	2.57B	2.17B	2.03B
	Total Debt
1.49B	1.49B	1.53B	1.75B	1.44B	1.18B
	Net Debt
1.27B	1.07B	1.47B	1.70B	1.41B	1.05B
	Total Liabilities
2.60B	2.62B	2.51B	2.77B	2.44B	2.05B
	Stockholders Equity
852.50M	850.20M	285.30M	-203.10M	-269.00M	-17.10M
Cash Flow		Free Cash Flow
773.10M	782.10M	486.00M	201.20M	408.70M	533.90M
	Operating Cash Flow
932.70M	945.70M	736.20M	302.30M	515.50M	612.40M
	Investing Cash Flow
-167.20M	-174.40M	-319.70M	-103.00M	-106.40M	-79.70M
	Financing Cash Flow
-602.20M	-418.60M	-406.20M	-174.10M	-498.70M	-441.80M

Lennox International Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 550.21
• 50DMA: Negative
• 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 550.21 is below the 20-day moving average (MA) of 569.21, below the 50-day MA of 559.27, and below the 200-day MA of 596.24, indicating a bearish trend. The MACD of -4.90 indicates Positive momentum. The RSI at 42.54 is Neutral, neither overbought nor oversold. The STOCH value of 33.66 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	81 Outperform	$94.04B	35.08	38.45%	0.89%	11.43%	28.49%
CARR	81 Outperform	$62.14B	16.63	25.69%	1.24%	0.14%	202.13%
CSL	78 Outperform	$15.95B	10.07	33.11%	1.08%	-0.14%	135.52%
LII	74 Outperform	$19.70B	24.75	131.48%	0.83%	7.78%	30.10%
JCI	74 Outperform	$67.71B	27.44	14.92%	1.43%	-8.39%	51.56%
OC	70 Outperform	$11.71B	49.44	11.93%	2.00%	16.16%	-77.11%
Sector *	66 Neutral	$4.52B	12.34	5.41%	3.62%	4.15%	-12.18%

Lennox International Corporate Events

Lennox International Elects Tracy A. Embree to Board

On May 22, 2025, Lennox International announced the election of Tracy A. Embree to its Board of Directors as a Class III Director, effective June 1, 2025. Ms. Embree, with extensive leadership experience from Otis Americas and Cummins Inc., will also join the Board Governance and Compensation and Human Resources Committees. Her compensation aligns with the company’s standard for non-employee directors. The Board confirmed her independence and lack of related party transactions requiring disclosure. Additionally, during the company’s Annual Meeting, stockholders voted on three proposals: electing two Class III Directors, approving executive compensation, and ratifying Ernst & Young LLP as the independent auditor for 2025. All proposals received significant approval, with the advisory vote on executive compensation achieving approximately 93% support.

The most recent analyst rating on (LII) stock is a Buy with a $600.00 price target. To see the full list of analyst forecasts on Lennox International stock, see the LII Stock Forecast page.

Lennox International Amends Credit Facility Agreement

On May 9, 2025, Lennox International Inc. amended its existing unsecured revolving credit facility with JPMorgan Chase Bank and other lenders. The amendment decreased the total revolving commitments from $1.1 billion to $1 billion, with an option to increase by up to $350 million, and extended the maturity date from July 2026 to May 2030, impacting the company’s financial flexibility and long-term planning.

The most recent analyst rating on (LII) stock is a Buy with a $600.00 price target. To see the full list of analyst forecasts on Lennox International stock, see the LII Stock Forecast page.