Lennox earnings selloff a buying opportunity, says William Blair

William Blair analyst Ryan Merkel recommends using the post-earnings selloff in shares of Lennox International as a buying opportunity. The shares are down 3% as a “convincing” Q4 beat was offset by initial 2024 earnings guidance slightly below the Street, the analyst tells investors in a research note. The firm says Lennox historically guides conservatively, and with easy residential comparisons and falling interest rates, it sees upside. Tailwinds such as the transition to A2L equipment in 2025, improving distribution margins, price excellence, and increasing commercial production capacity will drive strong earnings growth to 2026, contends Blair, which keeps an Outperform rating on the name.