Lennox International (LII) AI Stock Analysis

• Market Cap: $20.21B
• Dividend Yield: 0.81%
• Average Volume (3M): 395.21K
• Price to Earnings (P/E): 25.2
• Beta (1Y): 1.03
• Revenue Growth: 7.78%
• EPS Growth: 30.10%
• Country: US
• Employees: 14,200
• Sector: Industrials
• Sector Strength: 94
• Industry: Construction
• EPS (TTM): 3.37
• Shares Outstanding: 35,484,830
• 10 Day Avg. Volume: 321,154
• 30 Day Avg. Volume: 395,215
• PEG Ratio: -57.48
• Price to Book (P/B): 23.89
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 26.33
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $592.55
• Price Target Upside: 4.98% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 13

• Rating: 74 Outperform
• Price Target: $635.00 ▲(12.50%Upside)

Lennox International scores a 74, driven by strong financial performance and strategic initiatives that support growth. However, technical signals and valuation suggest caution. Earnings call details highlight both progress and challenges, which moderate the overall score.

Positive Factors

Joint Venture

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

Market Potential

Lennox estimates capturing a 5% share in the $10 billion US wholesale water heater market, potentially adding significant revenue growth.

Residential Performance

Residential segment results impressed with a 7% price/mix and share gains, showcasing strong performance.

Negative Factors

Analyst Rating

Analysts remain underweight on Lennox International and are lowering the price target due to concerns about organic downside in 2025.

Demand Concerns

There is concern that if volumes turn negative in the second half of 2025, market worries about 2026 performance will increase.

Short Interest

LII has the second-highest short interest ratio among coverage names, indicating skepticism from shorter-term investors.

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 displays robust financial health with strong growth in revenue and profitability. The company demonstrates operational efficiency and effective cash flow management. While the balance sheet shows improvement, past equity challenges signal a need for cautious leverage management. Overall, Lennox International is well-positioned in the construction industry with a positive financial trajectory.

Income Statement

Lennox International shows strong and consistent growth in revenue with a notable increase of 13.78% from 2023 to 2024 and 8.6% from 2022 to 2023. The company maintains healthy gross profit margins at 32.8% in TTM, driven by efficient operations. Net profit margins improved to 14.96% in TTM, reflecting enhanced profitability. EBIT and EBITDA margins are robust at 19.06% and 19.87% respectively, indicating strong operational efficiency.

Balance Sheet

The company's debt-to-equity ratio of 1.75 in TTM is moderate, suggesting manageable leverage, though equity is relatively low compared to assets, with an equity ratio of 24.67%. Return on equity is impressive at 94.19% due to efficient earnings generation. However, the negative stockholders' equity in previous years indicates past financial challenges.

Cash Flow

Lennox International's free cash flow growth is strong with a 59.12% increase from 2022 to 2023, showcasing effective cash management. The operating cash flow to net income ratio of 1.16 indicates solid cash generation relative to earnings. The free cash flow to net income ratio of 0.96 suggests nearly all earnings are being converted to free cash flow.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
5.37B	5.34B	4.98B	4.72B	4.19B	3.63B
	Gross Profit
1.76B	1.77B	1.55B	1.28B	1.19B	1.04B
	EBIT
1.02B	1.03B	790.10M	656.20M	590.30M	478.50M
	EBITDA
1.07B	1.13B	879.50M	729.00M	652.50M	553.90M
	Net Income Common Stockholders
802.90M	806.90M	590.10M	497.10M	464.00M	356.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
57.60M	422.30M	69.10M	61.10M	36.50M	129.00M
	Total Assets
2.99B	3.47B	2.80B	2.57B	2.17B	2.03B
	Total Debt
1.66B	1.49B	1.53B	1.75B	1.44B	1.18B
	Net Debt
1.61B	1.07B	1.47B	1.70B	1.41B	1.05B
	Total Liabilities
2.62B	2.62B	2.51B	2.77B	2.44B	2.05B
	Stockholders Equity
368.80M	850.20M	285.30M	-203.10M	-269.00M	-17.10M
Cash Flow		Free Cash Flow
773.10M	782.10M	486.00M	201.20M	408.70M	533.90M
	Operating Cash Flow
932.70M	945.70M	736.20M	302.30M	515.50M	612.40M
	Investing Cash Flow
-167.20M	-174.40M	-319.70M	-103.00M	-106.40M	-79.70M
	Financing Cash Flow
-602.20M	-418.60M	-406.20M	-174.10M	-498.70M	-441.80M

Lennox International Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 564.45
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LII, the sentiment is Negative. The current price of 564.45 is below the 20-day moving average (MA) of 579.66, above the 50-day MA of 562.41, and below the 200-day MA of 597.11, indicating a neutral trend. The MACD of 2.59 indicates Positive momentum. The RSI at 46.67 is Neutral, neither overbought nor oversold. The STOCH value of 13.52 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LII.

Lennox International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CSL	78 Outperform	$16.44B	10.39	33.11%	1.01%	-0.14%	135.52%
TT	76 Outperform	$96.41B	35.80	38.45%	0.80%	11.43%	28.49%
LII	74 Outperform	$20.21B	25.16	131.48%	0.81%	7.78%	30.10%
JCI	74 Outperform	$67.21B	27.03	14.92%	1.46%	-8.39%	51.56%
OC	71 Outperform	$11.39B	48.09	11.93%	1.93%	16.16%	-77.11%
CARR	71 Outperform	$61.04B	16.34	25.69%	1.12%	0.14%	202.13%
Sector *	65 Neutral	$4.46B	12.18	5.23%	249.77%	4.11%	-12.28%

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.