Lennox International (LII) AI Stock Analysis

• Market Cap: $23.34B
• Dividend Yield: 0.72%
• Average Volume (3M): 359.96K
• Price to Earnings (P/E): 28.4
• Beta (1Y): 1.02
• Revenue Growth: 7.92%
• EPS Growth: 29.72%
• Country: US
• Employees: 14,200
• Sector: Industrials
• Sector Strength: 93
• Industry: Construction
• EPS (TTM): 7.82
• Shares Outstanding: 35,124,283
• 10 Day Avg. Volume: 415,932
• 30 Day Avg. Volume: 359,957
• PEG Ratio: 6.71
• Price to Book (P/B): 26.18
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 34.84
• Enterprise Value/Market Cap: 1.07
• Enterprise Value/Revenue: 1.80
• Enterprise Value/Gross Profit: 26.53
• Enterprise Value/Ebitda: 14.57
• 1Y Price Target: $670.11
• Price Target Upside: 1.41% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 11

• Rating: 74 Outperform
• Price Target: $744.00 ▲(12.59%Upside)

Lennox International's strong financial performance and positive earnings call sentiment are significant strengths, but these are moderated by technical indicators suggesting possible short-term volatility and a high valuation. The company's strategic partnerships and raised guidance support long-term growth potential despite current challenges.

Positive Factors

Earnings

A very strong Q2 margin beat was driven by price/mix vastly outpacing cost, resulting in an increase in expected earnings projections.

Joint Venture

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

Market Strategy

Analyst's recommendation is supported by Lennox's strategy to recapture market share and drive margin expansion.

Negative Factors

Commercial Segment

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

Demand Uncertainty

There is uncertainty in the Heating, Cooling, and Solutions market due to a consumer shift from replacing to repairing, influenced by sharp inflation.

Market Concerns

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 shows strong financial performance with consistent revenue growth, robust profit margins, and solid cash flow management. However, the debt-to-equity ratio indicates a moderate level of leverage that needs close attention.

Income Statement

Lennox International has demonstrated strong revenue growth with a TTM (Trailing-Twelve-Months) revenue increase of 1.41% compared to the prior year. Gross profit margins are robust at 33.12%, and net profit margins have improved to 15.41%. The EBIT margin of 19.52% and EBITDA margin of 19.89% indicate strong operational efficiency. The steady revenue growth and healthy profit margins reflect a solid financial performance in the construction industry.

Balance Sheet

The company has managed to improve its stockholders' equity, which stands positive at $900.5 million as of the latest TTM data. The debt-to-equity ratio is 1.72, indicating a moderate level of leverage. The return on equity (ROE) is strong at 92.67%, due to the significant net income relative to equity. An equity ratio of 24.65% suggests a balanced approach to leveraging assets for growth. Overall, the balance sheet reflects improving financial stability, though attention to debt levels remains crucial.

Cash Flow

Lennox International exhibits strong cash flow management, with a free cash flow of $680.1 million for the TTM, marking a growth of -13.05% from the previous year. The operating cash flow to net income ratio is 1.00, indicating that operating cash flow fully supports net income. The free cash flow to net income ratio of 0.81 suggests solid cash conversion from earnings. While free cash flow has declined slightly, cash flow from operations remains robust, supporting ongoing investment and debt servicing.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.34B	4.98B	4.72B	4.19B	3.63B
Gross Profit	1.77B	1.55B	1.28B	1.19B	1.04B
EBITDA	1.13B	879.50M	729.00M	652.50M	553.90M
Net Income	806.90M	590.10M	497.10M	464.00M	356.30M
Balance Sheet
Total Assets	3.47B	2.80B	2.57B	2.17B	2.03B
Cash, Cash Equivalents and Short-Term Investments	422.30M	69.10M	61.10M	36.50M	129.00M
Total Debt	1.49B	1.53B	1.75B	1.44B	1.18B
Total Liabilities	2.62B	2.51B	2.77B	2.44B	2.05B
Stockholders Equity	850.20M	285.30M	-203.10M	-269.00M	-17.10M
Cash Flow
Free Cash Flow	782.10M	486.00M	201.20M	408.70M	533.90M
Operating Cash Flow	945.70M	736.20M	302.30M	515.50M	612.40M
Investing Cash Flow	-174.40M	-319.70M	-103.00M	-106.40M	-79.70M
Financing Cash Flow	-418.60M	-406.20M	-174.10M	-498.70M	-441.80M

Lennox International Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 660.82
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LII, the sentiment is Positive. The current price of 660.82 is above the 20-day moving average (MA) of 610.64, above the 50-day MA of 582.60, and above the 200-day MA of 596.09, indicating a bullish trend. The MACD of 20.55 indicates Negative momentum. The RSI at 72.25 is Negative, neither overbought nor oversold. The STOCH value of 73.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LII.

Lennox International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CARR	77 Outperform	$68.10B	18.27	25.69%	1.07%	0.14%	202.13%
LII	74 Outperform	$23.34B	28.41	112.94%	0.72%	7.92%	29.72%
CSL	74 Outperform	$18.58B	24.81	33.11%	0.92%	-0.14%	11.31%
OC	74 Outperform	$12.28B	52.52	11.93%	1.85%	16.16%	-77.11%
JCI	73 Outperform	$72.40B	29.34	14.92%	1.32%	-8.39%	51.56%
TT	72 Outperform	$102.97B	38.22	38.45%	0.75%	11.43%	28.49%
Sector *	68 Neutral	4.54B	10.05	12.94%	317.29%	4.42%	4.61%

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.