With a market cap of around $20 billion, Lennox International Inc. (LII) is a global leader in climate control solutions, specializing in heating, ventilation, air conditioning, and refrigeration (HVACR) products. It designs, manufactures, and markets a wide range of high-efficiency HVACR systems under brands such as Lennox, Armstrong Air, Bohn, and Heatcraft.
Companies valued at $10 billion or more are generally classified as “large-cap” stocks, and Lennox International fits this criterion perfectly. Headquartered in Richardson, Texas, Lennox serves residential, commercial, and industrial customers worldwide through direct sales, distributors, and company-owned stores.
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Shares of the company are trading 17.2% below its 52-week high of $682.50. Lennox has decreased 7.3% over the past three months, underperforming the broader Dow Jones Industrials Average’s ($DOWI) 1.3% dip over the same time frame.
In the longer term, Lennox stock is down 5.3% over the past six months, lagging behind DOWI’s marginal drop. However, shares of LII have gained 16.7% over the past 52 weeks, outperforming DOWI’s 6.1% return over the same time frame.
Despite the recent downturns, LII has remained mostly above its 50-day and 200-day moving averages since last year.
Despite reporting a better-than-expected Q4 2024 adjusted EPS of $5.60 and revenue of $1.4 billion, LII shares dropped 8.8% on Jan. 29 due to concerns over softer 2025 guidance, with core revenue expected to grow only 2%, reflecting a slowdown after the 2024 refrigerant pre-buy surge. Investors were also concerned about ongoing margin pressures, as Building Climate Solutions’ segment margin declined 160 basis points despite a 17% revenue increase, and factory ramp-up inefficiencies added $20 million in costs.
Nevertheless, Lennox has outpaced its rival, Carrier Global Corporation (CARR), which has surged 10.7% over the past 52 weeks. In addition, Carrier Global has declined 19.9% over the past six months.
Despite LII’s outperformance over the past year, analysts remain cautious about its prospects. The stock has a consensus rating of “Hold” from the 17 analysts covering the stock, and as of writing, it is trading below the mean price target of $635.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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