Lennox International (NYSE:LII – Get Free Report) announced its quarterly earnings data on Wednesday. The construction company reported $6.84 EPS for the quarter, missing analysts’ consensus estimates of $7.33 by ($0.49), Zacks reports. Lennox International had a net margin of 14.61% and a return on equity of 66.42%. The company had revenue of $1.57 billion for the quarter, compared to analyst estimates of $1.58 billion. During the same quarter last year, the company posted $6.98 EPS. Lennox International’s revenue was up 10.2% on a year-over-year basis.
Here are the key takeaways from Lennox International’s conference call:
- Third-quarter profitability declined despite strong revenue growth: revenue rose 10.2% to $1.6 billion, but total segment profit fell about 2% and adjusted EPS declined 7% to $6.84, as competitive pricing pressure and tariffs outpaced price realization.
- Lennox reduced its full-year outlook, now expecting approximately 6% revenue growth, adjusted EPS of $21.00–$21.50, and free cash flow of $700–$750 million. Home Comfort Solutions revenue is now expected to decline about 4%, while its full-year margin is projected to contract roughly 350 basis points.
- Building Climate Solutions remained a major growth driver, with revenue up 24% including 15% organic growth, supported by commercial equipment, services, emergency replacement demand, national accounts, and acquisitions; full-year segment growth is now expected to be approximately 23%.
- Management launched a recovery plan centered on more targeted pricing, cost and productivity actions, entry-tier product expansion, and deeper national-account relationships. The company expects these actions to support higher sales, EBIT, and EPS in 2027 without relying on a significant recovery in industry volumes, although the first half is expected to face continued tariff and inflation pressure.
- Cash generation and inventory management improved, with third-quarter operating cash flow of $395 million, trailing-12-month free-cash-flow conversion of 108%, and organic inventory units down more than 15%; Lennox also repurchased approximately $151 million of shares during the quarter.
Lennox International Price Performance
Shares of NYSE:LII opened at $334.39 on Thursday. The company has a market cap of $11.56 billion, a price-to-earnings ratio of 15.12, a PEG ratio of 1.57 and a beta of 1.16. The business has a 50 day moving average price of $371.01 and a 200 day moving average price of $473.93. The company has a quick ratio of 0.77, a current ratio of 1.57 and a debt-to-equity ratio of 0.89. Lennox International has a twelve month low of $322.00 and a twelve month high of $587.27.
Lennox International Dividend Announcement
The business also recently declared a quarterly dividend, which was paid on Thursday, October 15th. Shareholders of record on Wednesday, September 30th were issued a dividend of $1.36 per share. This represents a $5.44 annualized dividend and a yield of 1.6%. The ex-dividend date was Wednesday, September 30th. Lennox International’s dividend payout ratio (DPR) is 24.59%.
Key Headlines Impacting Lennox International
Here are the key news stories impacting Lennox International this week:
- Positive Sentiment: Third-quarter revenue increased 10.2% year over year to approximately $1.6 billion, led by 24% growth in the Building Climate Solutions segment and continued commercial demand. Lennox: 3 Key Takeaways for Long-Term Investors
- Positive Sentiment: Lennox added smart thermostat energy-saving services, which could support recurring revenue, customer retention and its energy-efficiency strategy. Lennox Adds Smart Thermostat Energy Saving Services
- Positive Sentiment: Some valuation analysis views the stock as potentially undervalued following the selloff, although that thesis depends on a recovery in margins and earnings. Lennox Stock May Be 44% Undervalued After Margin Pressure
- Neutral Sentiment: Stephens downgraded LII from “overweight” to “equal weight” but maintained a $350 price target, implying analysts see limited near-term upside from the reported share price. Stephens Stock Recommendations
- Negative Sentiment: Adjusted diluted EPS fell 7% to $6.84, missing the consensus estimate of $7.18–$7.33, while revenue was slightly below expectations. GAAP diluted EPS was $6.41. Lennox Reports 2026 Third Quarter Earnings Results
- Negative Sentiment: Management cut full-year 2026 adjusted EPS guidance to $21.00–$21.50 from $23.00–$24.00. Competitive pricing, inflation, tariffs and lower factory absorption pressured margins, particularly in Home Comfort Solutions.
Wall Street Analyst Weigh In
LII has been the subject of a number of recent analyst reports. The Goldman Sachs Group lowered shares of Lennox International from a “buy” rating to a “neutral” rating and decreased their price objective for the stock from $547.00 to $390.00 in a research note on Wednesday, October 14th. Morgan Stanley decreased their target price on Lennox International from $375.00 to $350.00 and set an “underweight” rating for the company in a research report on Thursday, October 15th. Wells Fargo & Company initiated coverage on Lennox International in a report on Friday, September 25th. They set an “equal weight” rating and a $424.00 price target on the stock. William Blair reissued an “outperform” rating on shares of Lennox International in a research note on Wednesday, July 29th. Finally, Deutsche Bank Aktiengesellschaft lowered Lennox International from a “buy” rating to a “hold” rating and decreased their price objective for the stock from $609.00 to $444.00 in a research report on Monday, September 14th. Three research analysts have rated the stock with a Buy rating, eleven have issued a Hold rating and two have issued a Sell rating to the stock. According to MarketBeat, the stock currently has an average rating of “Hold” and an average price target of $466.54.
View Our Latest Analysis on LII
Lennox International Company Profile
Lennox International Inc is a heating, ventilation, air conditioning and refrigeration company headquartered in Richardson, Texas. Founded in 1895 by Dave Lennox, the company develops and markets products designed to provide climate control and improve indoor air quality in residential and commercial buildings.
Its product portfolio includes air conditioners, heat pumps, furnaces, air handlers, thermostats, indoor air-quality equipment and related controls. Lennox also provides commercial heating and cooling systems, replacement components, installation support and other services through distributors, dealers and contractors.
Lennox primarily serves customers in the United States and Canada, with products and services also marketed in selected international markets.
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