Lennox International (LII) AI Stock Analysis

• Market Cap: $19.72B
• Dividend Yield: 0.85%
• Average Volume (3M): 390.34K
• Price to Earnings (P/E): 23.3
• Beta (1Y): 1.01
• Revenue Growth: 7.92%
• EPS Growth: 29.72%
• Country: US
• Employees: 14,200
• Sector: Industrials
• Sector Strength: 74
• Industry: Construction
• EPS (TTM): 7.82
• Shares Outstanding: 35,124,283
• 10 Day Avg. Volume: 425,105
• 30 Day Avg. Volume: 390,340
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.11
• Enterprise Value/Revenue: 4.03
• Enterprise Value/Gross Profit: 12.17
• Enterprise Value/Ebitda: 18.85
• 1Y Price Target: $669.73
• Price Target Upside: 15.86% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 13

• Rating: 74 Outperform
• Price Target: $660.00 ▲(14.18% Upside)

Lennox International's strong financial performance and positive earnings call guidance are significant strengths, supporting a solid stock score. However, technical indicators suggest limited momentum, and the valuation indicates moderate pricing, which tempers the overall score.

Positive Factors

Acquisition

Lennox announced the acquisition of NSI Industries’ HVAC assets, Duro Dyne and Supco, for $550 million, which is expected to add $225 million in revenue and enhance the company's overall financial performance.

Financial Performance

Shares are up 8% with a 14% EPS beat and raised guide mainly due to stronger margins, signaling strong financial performance.

Joint Venture

Lennox announced a joint venture with Ariston Group to sell residential water heaters by leveraging the Lennox brand and distribution, expanding product categories and improving distribution economics.

Negative Factors

Consumer Sentiment

Consumer purchase intentions have likely decreased, which may contribute to ongoing challenges for Lennox International.

Demand Challenges

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.

Market Uncertainty

There is limited near-term relative valuation expansion expected due to elevated market uncertainty and diminished revision risk.

Lennox International Business Overview & Revenue Model

Company Description

Lennox International Inc. (LII) is a global leader in the heating, ventilation, air conditioning, and refrigeration (HVACR) markets. The company operates through three primary segments: Residential Heating & Cooling, Commercial Heating & Cooling, and Refrigeration. Lennox designs, manufactures, and distributes a range of innovative HVAC systems, equipment, and related products, focusing on energy efficiency and sustainability. Its core offerings include air conditioners, furnaces, heat pumps, and refrigeration products, serving both residential and commercial customers.

How the Company Makes Money

Lennox International generates revenue primarily through the sale of HVAC systems and related products across its three segments. The Residential Heating & Cooling segment contributes significantly to revenue by providing a wide range of heating and cooling systems for homes. The Commercial Heating & Cooling segment focuses on larger-scale HVAC solutions for businesses and commercial properties, while the Refrigeration segment offers products and services for the food service and retail industries. Additionally, Lennox earns revenue through service and maintenance contracts, as well as parts and accessories for its systems. The company's strong relationships with distributors and contractors enhance its market reach and sales, contributing to its overall earnings. Lennox also invests in research and development to innovate and improve product efficiency, which helps maintain its competitive edge and attract customers in a rapidly evolving industry.

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 balance sheet indicates moderate leverage, which requires monitoring.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.42B	5.34B	4.98B	4.72B	4.19B	3.63B
Gross Profit	1.79B	1.77B	1.55B	1.28B	1.19B	1.04B
EBITDA	1.16B	1.13B	879.50M	733.50M	658.50M	547.50M
Net Income	834.60M	806.90M	590.10M	497.10M	464.00M	356.30M
Balance Sheet
Total Assets	3.65B	3.47B	2.80B	2.57B	2.17B	2.03B
Cash, Cash Equivalents and Short-Term Investments	55.10M	422.30M	69.10M	61.10M	36.50M	129.00M
Total Debt	1.55B	1.49B	1.53B	1.75B	1.44B	1.18B
Total Liabilities	2.75B	2.62B	2.51B	2.77B	2.44B	2.05B
Stockholders Equity	900.50M	850.20M	285.30M	-203.10M	-269.00M	-17.10M
Cash Flow
Free Cash Flow	680.10M	782.10M	486.00M	201.20M	408.70M	533.90M
Operating Cash Flow	835.50M	945.70M	736.20M	302.30M	515.50M	612.40M
Investing Cash Flow	-168.80M	-174.40M	-319.70M	-103.00M	-106.40M	-79.70M
Financing Cash Flow	-668.50M	-418.60M	-406.20M	-174.10M	-498.70M	-441.80M

Lennox International Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 578.05
• 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 Neutral. The current price of 578.05 is below the 20-day moving average (MA) of 578.66, below the 50-day MA of 597.32, and below the 200-day MA of 593.77, indicating a bearish trend. The MACD of -11.56 indicates Positive momentum. The RSI at 49.07 is Neutral, neither overbought nor oversold. The STOCH value of 43.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LII.

Lennox International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LII	74 Outperform	$19.72B	23.30	112.94%	0.85%	7.92%	29.72%
OC	74 Outperform	$12.74B	39.03	12.26%	1.72%	13.08%	-67.65%
MAS	73 Outperform	$15.15B	19.22	-118.61%	1.65%	-2.73%	-8.31%
TT	71 Outperform	$91.93B	32.40	38.89%	0.88%	10.20%	24.57%
JCI	71 Outperform	$70.08B	31.81	12.52%	1.39%	-13.10%	40.62%
CARR	68 Neutral	$54.07B	24.93	10.79%	1.32%	-5.24%	-33.37%
Sector *	66 Neutral	$2.65B	14.38	13.52%	3.54%	2.94%	43.39%

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.