Lennox International (LII) AI Stock Analysis

Company Guidance

For 2026, Lennox updated adjusted EPS guidance to $21 to $21.50, revenue growth to approximately 6% compared with 8% previously, price and mix growth to low single digit growth compared with mid single digit growth previously, and overall volume to a low single digit decline; BCS revenue growth is expected to be approximately 23%, up from 20%, while HCS revenue is expected to decline approximately 4% compared with the prior expectation for 1% growth, and free cash flow guidance was reduced to $700 million to $750 million from $750 million to $850 million. The expected tax rate is 21% compared with 20% in prior guidance, capital expenditures are expected to be approximately $225 million, fourth-quarter organic total sales are expected to decline mid single digit, full-year 1-step sales are expected to be down low double digits and 2-step sales up low single digits, enterprise margins are expected to decline about 200 basis points, BCS full-year margins are expected to be approximately flat, and HCS margins are expected to contract about 50 basis points. Lennox is not providing 2027 guidance today, but expects successful execution of its recovery plan to drive sales EBIT and EPS growth in 2027, with higher sales, higher EPS, and higher EBIT dollars, while the first half of 27 will be more challenging, industry volumes will be muted, and the company is aiming for price increases of more than the traditional 1-2.