Lennox International Inc. (LII) AI Stock Analysis

Lennox International Inc. designs, manufactures, and markets products for the heating, ventilation, air conditioning, and refrigeration markets globally, with primary operations in the United States and Canada. The company organizes its business into three segments: Residential Heating & Cooling, Commercial Heating & Cooling, and Refrigeration. Residential offers furnaces, air conditioners, heat pumps, packaged systems, and replacement parts for replacement and new construction markets. Commercial provides unitary heating and cooling equipment, applied systems, controls, and variable refrigerant flow products. Refrigeration sells condensing units, unit coolers, air handlers, rack systems, and process chillers for supermarkets, convenience stores, restaurants, distribution centers, and data centers.

Between FY2021 and FY2024, revenue climbed from $4.19B to $5.34B before declining 2.7% to $5.20B in FY2025. Despite top-line contraction in FY2025, gross margin expanded to 33.4% and operating margin rose to 20.0%, compared to 28.3% and 14.1% in FY2021. Net income reached $805.8M in FY2025 with diluted EPS of $22.62, up from $464.0M and $12.59 in FY2021. For the latest quarter ended June 30, 2026, revenue increased 3.0% year-over-year, while quarterly earnings growth was 0.1%. Lennox produced $638.8M in free cash flow in FY2025.

As of June 30, 2026, Lennox held $52.1M in cash and short-term investments against total debt of $2.02B, resulting in net debt of $1.97B. Shareholders' equity stood at $1.30B, yielding a debt-to-equity ratio of 1.56, while the current ratio was 1.57. In FY2025, operating cash flow was $757.6M, which supported capital expenditures of $118.8M, dividend payments of $173.0M, and share buybacks of $501.5M. The company has reduced its share count by 5.4% over five years.

Lennox trades at a trailing P/E of 15.8x and a forward P/E of 14.2x, lower than the median of its S&P 500 Industrials peers of 28.5x and 20.7x, respectively. Its enterprise value to EBITDA ratio is 12.7x compared to the peer median of 17.7x, and its price-to-sales multiple is 2.3x versus the peer median of 3.3x. Over the past year, the stock fell 30.9%, trailing the S&P 500 ETF (SPY) return of 16.8%. Over five years, Lennox gained 22.9% versus 83.0% for the S&P 500.

Lennox pays an annualized forward dividend of $5.44 per share, providing a 1.52% dividend yield based on the last close of $357.73. The dividend payout ratio is 23.6%, and payments are distributed on a quarterly basis. Lennox has paid dividends for 28 consecutive years and achieved a 5-year annualized dividend growth rate of 10.4%. The last ex-dividend date was September 30, 2026.

Wall Street coverage includes 3 Strong Buy, 1 Buy, 13 Hold, and 1 Strong Sell recommendations among 18 analysts. The mean price target is $449.29, representing 25.6% upside from the last close of $357.73. For the fiscal year ending December 31, 2026, analysts estimate EPS of $23.45 on $5.59B in revenue, followed by $25.80 on $5.93B in FY2027. The company beat EPS estimates in 3 of the last 4 quarters, with its next earnings release scheduled for October 28, 2026.

This page is an AI-written research summary of Lennox International Inc. (LII). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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