Buy Rating Affirmed for Lennox International Amid Solid Performance and Market Growth Prospects

Analyst Brett Linzey from Mizuho Securities reiterated a Buy rating on Lennox International (LII – Research Report) and keeping the price target at $540.00.

Brett Linzey’s rating is based on a mix of strong company performance and favorable market conditions. Lennox International has demonstrated solid execution, particularly during the typically variable first quarter, and is expected to continue seeing price increases as a result of the introduction of new products. With the stabilization of distributor inventories and the anticipated end of destocking, Linzey predicts a positive outlook for the company. The expansion of the Mexico factory is poised to bolster Lennox’s market share in the commercial sector, and the company’s self-help strategies, coupled with the recovering residential market, provide a strong foundation for growth.
Furthermore, Lennox’s financial indicators are encouraging, with an upward revision of earnings per share estimates for the coming years. The company has managed to outperform both the estimates set by Mizuho Securities and the consensus, which underscores its operational excellence. Lennox’s ability to maintain stable orders in the commercial segment, along with a significant increase in organic sales growth, has contributed to this optimistic assessment. Pricing strategies are advancing as expected, and Lennox’s margins are improving, which, in Brett Linzey’s view, validates the Buy rating and supports the maintained price target for the company’s stock.

In another report released yesterday, J.P. Morgan also maintained a Buy rating on the stock with a $360.00 price target.

LII’s price has also changed moderately for the past six months – from $345.510 to $467.850, which is a 35.41% increase.

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Lennox International (LII) Company Description:

Lennox International, Inc. engages in the design, manufacture, and marketing of products for heating, ventilation, air conditioning, and refrigeration. It operates through the following business segments: Residential Heating & Cooling, Commercial Heating & Cooling, and Refrigeration. The Residential Heating & Cooling segment manufactures and markets furnaces, air conditioners, heat pumps, packaged heating and cooling systems, equipment, and accessories. The Commercial Heating & Cooling segment sells unitary heating and cooling equipment used in light commercial applications. The Refrigeration segment includes retails equipment for commercial refrigeration market including condensing unit, unit coolers, fluid, coolers, air cooled condensers, supermarket display cases, and systems. The company was founded by Dave Lennox in 1895 and is headquartered in Richardson, TX.