Lennox International Inc.

Lennox International Inc.

LIIยทNYSE

$515.30

-0.21%
IndustrialsConstruction

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.

At a Glance

Live Snapshot
Market Cap$17.93B
EPS22.3100
P/E Ratio23.10
Earnings Date07/22/2026

Intrinsic Alpha Methodology

Thesis Lenses

Signal ยท Driver ยท Risk

Signal

High confidence

Valuation multiple is mid-range (P/E 23.1).

Valuation inputs: P/E 23.1, earnings yield +4.3%, momentum -0.2%.

If multiples stay elevated while momentum fades, downside repricing risk rises.

Driver

High confidence

Return profile is strong (ROE +67.6%, ROIC +25.5%).

Profitability stack: net margin +15.1%, ROE +67.6%, ROIC +25.5%.

Quality deterioration often appears in margins before it shows up in headline EPS.

Risk

High confidence

Risk profile is balanced but has notable pressure points to monitor.

Risk factors: liabilities/assets +71.5%, momentum -0.2%, net margin +15.1%.

Higher leverage with weak momentum and thin margins can amplify drawdown severity.

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Lennox International Inc. Market vs Earnings Trajectory

LII ยท NYSE

Loading price and EPS data...

Lennox International Inc.

Lennox International Inc. Fair Value Envelope

LII ยท NYSE

Our analysis suggests that LII has a fair value of HIDDEN per share in the Base Case projection. With shares currently trading at $515.3, this represents a potential HIDDEN relative to our calculated worth for Lennox International Inc..

Intrinsic Value
Current Price: $515.3
3Y+60.0%
5Y+140.0%
10Y+249.0%
3Y+10.0%
5Y+43.0%
10Y+43.0%
3Y+58.0%
5Y+121.0%
10Y+183.0%
3Y+151.0%
5Y+24.0%
10Y+114.0%
3Y+217.0%
5Y+20.0%
10Y+136.0%
3Y+59.0%
5Y+101.0%
10Y+132.0%
Lennox International Inc.

Lennox International Inc. Profit Bridge

LII ยท NYSE
Revenue5.20B
Cost of Goods Sold (3.48B)
Gross Profit1.72B
Operating Expenses (699.70M)
Operating Income1.02B
Interest Expense (40.90M)
Other Income/Expense-44.70M
Pretax Income970.90M
Income Tax (184.70M)
Net Income786.20M
Net Income
786.20M

Profitability Analysis

Gross Margin

33.0%

Moderate margins typical of competitive industries. Monitor for pricing pressure or rising costs.

Operating Margin

19.5%

Healthy operating margins demonstrate effective cost control and strong business fundamentals.

Net Profit Margin

15.1%

Strong net margins indicate efficient operations and favorable tax/interest management.

Effective Tax Rate

19.0%

Moderate tax rate typical for most corporations. Represents standard tax burden on profits.

Profitability Insight

Efficient profit conversion: Minimal margin compression from gross to net indicates lean operations and favorable tax/interest environment.

33.02%
Gross Profit Margin
3Y+21.0%
5Y+15.0%
10Y+12.0%
19.55%
Operating Profit Margin
1%
3Y+41.0%
5Y+48.0%
10Y+66.0%
15.13%
Net Profit Margin
3Y+44.0%
5Y+54.0%
10Y+98.0%
67.60%
Return on Equity
-29%
3Y-128.0%
5Y-103.0%
10Y-91.0%
19.26%
Return on Assets
-17%
3Y-1.0%
5Y+10.0%
10Y+22.0%
25.51%
Return on Invested Capital
-23%
3Y-16.0%
5Y-7.0%
10Y-3.0%
LII

Lennox International Inc. Cash Conversion Engine

LII ยท NYSE
Net Income805.80M
Depreciation & Amortization112.50M
Stock-Based Compensation29.10M
Change in Working Capital-224.30M
Others14.30M
Capital Expenditures-118.80M
Free Cash Flow638.80M

Cash Flow Quality Analysis

FCF Conversion Rate

79.3%

Moderate conversion rate. Some gap between earnings and cash flow may warrant investigation into working capital or non-cash items.

CapEx Intensity

15.7%

Asset-light business model. Low capital requirements leave more cash available for shareholders and growth investments.

FCF Growth Trend

-18.3%

Significant FCF decline raises concerns. Urgent review needed of operational performance and capital allocation.

Working Capital Impact

-$224.30M

Moderate working capital outflow. Typical for growing businesses, but ensure it's supporting revenue growth, not inefficiency.

Cash Flow Quality Insight

Working capital strain: Significant cash tied up in operations. Monitor receivables collection, inventory turns, and payment terms to optimize cash conversion cycle.

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Lennox International Inc. Funding & Solvency Profile

LII ยท NYSE
Cash & Cash Equivalents48.20M
Net Receivables647.90M
Inventory1.21B
Other Current Assets124.30M
Total Current Assets2 B
Property, Plant & Equipment1.32B
Goodwill & Intangible Assets773.40M
Long-Term Investments0.00
Other Non-Current Assets152.60M
Total Non-Current Assets1 B
Total Assets
4.29B

Financial Health Analysis

Current Ratio

1.57x

Strong liquidity. The company has adequate resources to meet short-term liabilities.

Debt-to-Equity Ratio

2.54x

High financial leverage. Heavy reliance on debt may indicate increased financial risk and potential solvency concerns.

Working Capital

740 M

Strong working capital position provides significant operational flexibility and financial cushion.

Asset Composition

47% Current

Balanced asset mix between current and non-current assets, typical of many stable businesses.

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Lennox International Inc. Street Expectations Map

LII ยท NYSE

Wall Street analysts project that LII stock may experience modest gains over the coming 12 months. The consensus 1-year price target stands at 553.45, with estimates ranging from a low of 450.00 to a high of 650.00.

Lowest Target
450.00
-12.67%
Consensus Target
553.45
7.40%
Highest Target
650.00
26.14%

The consensus 1-year price target stands at 553.45, with estimates ranging from a low of 450.00 to a high of 650.00.

Analyst Consensus Analysis

Upside Potential

+7.4%

Moderate upside. Analysts expect positive returns but with limited margin of safety. Consider entry timing.

Analyst Agreement

36.1% spread

Good consensus alignment. Moderate target spread reflects general agreement on value drivers with some variance in assumptions.

Risk-Reward Profile

2.06x

Favorable risk-reward. Potential upside significantly exceeds downside risk, offering asymmetric return profile attractive for risk-tolerant investors.

Analyst Conviction

High

Positive outlook with reasonable agreement. Analysts generally optimistic about prospects with manageable uncertainty.

Market Sentiment Insight

Monitor and evaluate: Current analyst consensus suggests limited conviction or near-term catalysts. Stay informed on company developments and reassess positioning as new information emerges.

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Lennox International Inc. Insider Positioning

LII ยท NYSE

During the last 12 months, insiders have sold $7.52M worth of LII shares, with no buying activity reported.

3 Months

Bought

0

0.00

Sold

971

529.00K

Net Activity

-529K

-$529K

3-6 Months

Bought

0

0.00

Sold

1.1K

563.69K

Net Activity

-564K

-$564K

6-9 Months

Bought

0

0.00

Sold

600

295.11K

Net Activity

-295K

-$295K

9-12 Months

Bought

0

0.00

Sold

9.9K

6.13M

Net Activity

-6.1M

-$6.13M

Top Buyers

No buying activity

Top Sellers

1
NJWI

Norris John W Iii

Director

7.3K sharesโ€ข4 transactions

$4.45M

2
SDM

Sessa Daniel M

Officer: Evp, Chief Hr Officer

2.1K sharesโ€ข1 transactions

$1.44M

3
KC

Kosel Chris

Officer: Vp-Corp Controller And Cao

1.5K sharesโ€ข3 transactions

$843K

4
TTJ

Teske Todd J

Director

1.3K sharesโ€ข2 transactions

$669K

5
QKH

Quintos Karen H

Director

105 sharesโ€ข1 transactions

$64K

Insider Activity Analysis

Net Insider Sentiment

Bearish

Strong bearish signal with $7.52M net selling. Heavy insider selling may indicate concerns about valuation or near-term prospects.

Buy/Sell Ratio

0.00:1

Very poor ratio. Heavy selling with minimal buying suggests insiders may be concerned about valuation or outlook.

Recent Trend (3 Months)

$529K

Heavy recent selling activity. Recent insider sales notably exceed purchasesโ€”may warrant investigation into company developments.

Insider Participation

High Selling

5 insider sellers vs. 0 buyers. Widespread selling across multiple insiders may signal concerns.

Insider Activity Insight

Multiple red flags: Heavy selling, numerous sellers, and continued recent selling create a concerning pattern. Investigate fundamental drivers and consider whether company guidance or industry conditions have deteriorated.

0.28%
Dividend Yield
4%
3Y-34.0%
5Y+12.0%
10Y+11.0%
ย 

lii Dividend History

LII
10Y CAGR +12%
Latest $1.36
Annual $6.56
5 year growth trend
Last Period: +5%