Shares of Lennox International (LII) gained 2.1% to close at $327.32 on Monday after the company reported excellent financial results for the second quarter of 2021. Based out of Texas, Lennox develops and sells refrigeration, heating, air conditioning and ventilation products.
Adjusted earnings per share (EPS) grew 54% year-over-year to $4.57, surpassing the Street’s estimate of $4.24. Quarterly revenue increased 32% year-over-year to $1.24 billion on strong growth in all business segments. The analysts had expected the company to report revenue of $1.15 billion.
Revenue in the Residential Heating & Cooling business segment rose 30% to $838 million; the Commercial Heating & Cooling business segment’s revenue surged 34% to $253 million; and revenue in the Refrigeration business segment climbed 37% to $148 million.
The Chairman and CEO of Lennox, Todd Bluedor, said, “Looking ahead for the company overall, we have raised 2021 guidance for revenue, earnings and free cash flow on strong market growth and company performance. Momentum continues into the second half of the year for Residential, as well as for Commercial and Refrigeration, which continue to rebound and benefit from the pent-up demand created last year. As we look to 2022 and beyond, we see the residential replacement cycle spinning faster and continue to position our business to capitalize on strong market growth and share gains.”
The company raised its 2021 guidance on July 14. It expects revenue growth of 11% to 15%, and adjusted EPS between $12.10 and $12.70. (See Lennox stock chart on TipRanks)
Deutsche Bank analyst Nicole DeBlase recently maintained a Hold rating on the stock and raised the price target to $351 from $347 (7.2% upside potential).
In a research note to investors, the analyst stated, “Expectations for the sector are much lower than they were three months ago, as the group has underperformed the S&P 500 by seven percentage points since the end of Q1 earnings.”
Overall, the stock has a Moderate Sell consensus based on 5 Holds and 5 Sells. The average Lennox International price target of $320.67 implies 2% downside potential to current levels. The company’s shares have gained 22% year-to-date.
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