olivLaw · US equity research
Lennox International Inc. LII
Air-Cond & Warm Air Heatg Equip & Comm & Indl Refrig Equip · SIC 3585 · Vertical: Industrial machinery and computer equipment (SIC 358x)
Lennox International is a global leader in energy-efficient climate-control solutions, designing and selling heating, ventilation, air conditioning and refrigeration equipment through its Home Comfort Solutions and Building Climate Solutions segments. The company reported net sales of 5195.3 million USD in fiscal 2025, and in the second quarter of 2026 sales reached 1545.3 million USD, amid weak residential demand partly offset by the commercial segment.
The AI analysis may be outdated: new filings came after its sources (see the «AI analysis» section).
At the close of 04 Nov 2026, Lennox International Inc. (LII) stock was 358.96 USD (+3.60% on the day), with market capitalisation 12.3 bn USD, P/E 16.7 on diluted EPS of 21.55 USD over the last 12 months, dividend yield 1.41%, beta 1.08, 52-week range 332.64–572.95 USD. Latest reported quarter (Q3 2026): revenue of 1.6 bn USD (+10.2% YoY), net income of 221.2 m USD (−14.9% YoY), diluted EPS 6.41 USD.
Data as of · AI analysis dated · Source: SEC filings and closing prices, computed by olivLaw.
Price history
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Technical reading
- RSI (14)
- 49.2
- neutral
- Bollinger (20, 2)
- 335.86 – 379.35
- in the upper half of the band · %B 0.53 · band width 12.2%
- SMA 50 / 200
- 365.65 / 469.47
- downtrend (price < SMA50 < SMA200)
- MACD (12, 26, 9)
- -4.89 / -4.95
- MACD above signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | S&P 500 | vs S&P 500 | Vertical median | |
|---|---|---|---|---|
| 1 month | −0.6% | −1.1% | +0.5 pp | — |
| 3 months | −19.7% | −0.5% | −19.2 pp | — |
| 6 months | −33.7% | +4.4% | −38.1 pp | — |
| Year to date | −26.1% | +12.3% | −38.4 pp | — |
| 1 year | −27.1% | +13.5% | −40.6 pp | +0.5% |
| 3 years | −7.3% | +76.4% | −83.7 pp | +34.8% |
| 5 years | +18.8% | +63.7% | −44.9 pp | — |
Price returns, dividends excluded.
Quarterly results
Latest quarter: Q3 2026 · 30 Sept 2026
Quarterly margins
Quarterly statements · USD
| Fiscal year | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 | Q3 '26 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 1.3 bn | 1.1 bn | 1.5 bn | 1.4 bn | 1.2 bn | 1.1 bn | 1.5 bn | 1.6 bn |
| Cost of revenue | 884.1 m | 731.7 m | 983.4 m | 939.6 m | 805.7 m | 783.8 m | 1.0 bn | 1.1 bn |
| Gross profit | 460.9 m | 340.9 m | 517.5 m | 487.2 m | 389.3 m | 351.3 m | 539.5 m | 497.2 m |
| SG&A | 207.0 m | 171.3 m | 173.3 m | 161.6 m | 175.2 m | 185.2 m | 183.1 m | 177.3 m |
| Operating income | 250.2 m | 168.0 m | 349.0 m | 328.8 m | 195.8 m | 163.5 m | 355.0 m | 312.1 m |
| Depreciation & amortisation | 25.5 m | 25.6 m | 26.8 m | 27.0 m | 33.1 m | 29.2 m | 32.6 m | 34.6 m |
| Interest expense | 5.5 m | 6.2 m | 8.3 m | 10.5 m | 15.9 m | 15.2 m | 14.7 m | 17.5 m |
| Pre-tax income | 244.3 m | 160.8 m | 340.0 m | 317.4 m | 178.7 m | 146.9 m | 339.6 m | 293.3 m |
| Income tax | 42.4 m | 31.2 m | 66.1 m | 57.5 m | 36.2 m | 29.7 m | 70.6 m | 72.1 m |
| Net income | 201.9 m | 129.6 m | 273.9 m | 259.9 m | 142.5 m | 117.2 m | 269.0 m | 221.2 m |
| Diluted EPS | 5.64 ≈ | 3.63 | 7.71 | 7.38 | 4.07 | 3.35 | 7.72 | 6.41 |
| Operating cash flow | 332.4 m | -35.8 m | 86.8 m ≈ | 300.7 m ≈ | 405.9 m | 16.1 m | 172.0 m ≈ | 395.3 m ≈ |
| Capex | 60.2 m | 25.5 m | 28.5 m ≈ | 35.6 m ≈ | 29.2 m | 55.5 m | 35.7 m ≈ | 33.2 m ≈ |
| Dividends paid | 41.0 m | 40.9 m | 40.8 m ≈ | 45.7 m ≈ | 45.6 m | 45.2 m | 45.3 m ≈ | 47.0 m ≈ |
| Share repurchases | 40.7 m | 85.2 m | 209.6 m ≈ | 37.0 m ≈ | 150.5 m | 19.5 m | 131.8 m ≈ | 150.6 m ≈ |
≈ derived quarter (cumulative difference / share-days average)
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Today's P/E sits at the 8 percentile of its own 40-quarter history (min 16.0, median 25.4, max 30.4; quarters with earnings only).
Fiscal years
| Fiscal year | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 3.9 bn | 3.8 bn | 3.6 bn | 4.2 bn | 4.7 bn | 5.0 bn | 5.3 bn | 5.2 bn |
| Revenue YoY | +1.2% | −2.0% | −4.5% | +15.4% | +12.5% | +5.6% | +7.2% | −2.7% |
| Net income | 359.0 m | 408.7 m | 356.3 m | 464.0 m | 497.1 m | 591.2 m | 811.1 m | 805.8 m |
| Net income YoY | +17.4% | +13.8% | −12.8% | +30.2% | +7.1% | +18.9% | +37.2% | −0.7% |
| Diluted EPS | 8.74 | 10.38 | 9.24 | 12.39 | 13.88 | 16.58 | 22.66 | 22.79 |
| Diluted EPS YoY | +22.4% | +18.8% | −11.0% | +34.1% | +12.0% | +19.5% | +36.7% | +0.6% |
| net % | 9.2% | 10.7% | 9.8% | 11.1% | 10.5% | 11.9% | 15.2% | 15.5% |
| Free cash flow | 400.3 m | 290.5 m | 533.9 m | 408.7 m | 201.2 m | 486.0 m | 782.1 m | 638.8 m |
Reported results vs expectations
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Balance sheet & financial health
Fiscal year 2025 · 31 Dec 2025
- Cash
- 34.2 m USD
- Financial debt
- 18.3 m USD
- Net debt
- -15.9 m USD
- Equity
- 1.2 bn USD
- Total assets
- 4.1 bn USD
- Debt / equity
- 0.02x
- Current ratio
- 1.60x
- ROE
- 80.0%
- ROA
- 20.9%
- FCF margin
- 12.3%
Financial statements (source on every figure)
Revenue and net income (USD)
Margins
Income statement · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Revenue | 3.6 bn | 4.2 bn | 4.7 bn | 5.0 bn | 5.3 bn | 5.2 bn | SEC (XBRL)· 17 Feb 2026verified |
| Cost of revenue | 2.6 bn | 3.0 bn | 3.4 bn | 3.4 bn | 3.6 bn | 3.5 bn | SEC (XBRL)· 17 Feb 2026verified |
| Gross profit | 1.0 bn | 1.2 bn | 1.3 bn | 1.5 bn | 1.8 bn | 1.7 bn | SEC (XBRL)· 17 Feb 2026verified |
| Research & development | 66.8 m | 76.1 m | 80.3 m | 94.0 m | 93.6 m | 103.4 m | SEC (XBRL)· 17 Feb 2026verified |
| SG&A | 555.9 m | 598.9 m | 627.2 m | 705.5 m | 730.6 m | 681.4 m | SEC (XBRL)· 17 Feb 2026verified |
| Operating income | 478.5 m | 590.3 m | 656.2 m | 791.5 m | 1.0 bn | 1.0 bn | SEC (XBRL)· 17 Feb 2026verified |
| Depreciation & amortisation | 72.6 m | 72.4 m | 77.9 m | 86.0 m | 95.1 m | 112.5 m | SEC (XBRL)· 17 Feb 2026verified |
| EBITDA | 551.1 m ≈ | 662.7 m ≈ | 734.1 m ≈ | 877.5 m ≈ | 1.1 bn ≈ | 1.2 bn ≈ | SEC (XBRL)· 17 Feb 2026derived |
| Interest expense | 28.3 m | 25.0 m | 38.7 m | 51.7 m | 38.7 m | 40.9 m | SEC (XBRL)· 17 Feb 2026verified |
| Pre-tax income | 445.2 m | 560.1 m | 615.8 m | 738.9 m | 999.4 m | 996.8 m | SEC (XBRL)· 17 Feb 2026verified |
| Income tax | 88.1 m | 96.1 m | 118.7 m | 147.7 m | 188.3 m | 191.0 m | SEC (XBRL)· 17 Feb 2026verified |
| Net income | 356.3 m | 464.0 m | 497.1 m | 591.2 m | 811.1 m | 805.8 m | SEC (XBRL)· 17 Feb 2026verified |
| Diluted EPS | 9.24 | 12.39 | 13.88 | 16.58 | 22.66 | 22.79 | SEC (XBRL)· 17 Feb 2026verified |
| Weighted average diluted shares | 38.6 m | 37.5 m | 35.8 m | 35.7 m | 35.8 m | 35.4 m | SEC (XBRL)· 17 Feb 2026verified |
| Dividend per share | 3.08 | 3.53 | 4.10 | 4.36 | 4.55 | 5.05 | SEC (XBRL)· 17 Feb 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating income + Depreciation & amortisation.
Balance sheet · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Cash | 123.9 m | 31.0 m | 52.6 m | 60.7 m | 415.1 m | 34.2 m | SEC (XBRL)· 17 Feb 2026verified |
| Inventories | 439.4 m | 510.9 m | 753.0 m | 841.8 m | 853.0 m | 1.2 bn | SEC (XBRL)· 17 Feb 2026verified |
| Current assets | 1.1 bn | 1.2 bn | 1.5 bn | 1.6 bn | 2.0 bn | 1.9 bn | SEC (XBRL)· 17 Feb 2026verified |
| Property, plant & equipment, net | 464.3 m | 515.1 m | 548.9 m | 720.4 m | 800.1 m | 887.2 m | SEC (XBRL)· 17 Feb 2026verified |
| Goodwill | 186.9 m | 186.6 m | 186.3 m | 222.1 m | 220.0 m | 497.2 m | SEC (XBRL)· 17 Feb 2026verified |
| Intangibles (excl. goodwill) | — | — | — | — | 45.1 m | 273.0 m | SEC (XBRL)· 17 Feb 2026verified |
| Total assets | 2.0 bn | 2.2 bn | 2.6 bn | 2.9 bn | 3.6 bn | 4.1 bn | SEC (XBRL)· 17 Feb 2026verified |
| Accounts payable | 340.3 m | 402.1 m | 427.3 m | 374.7 m | 490.0 m | 438.0 m | SEC (XBRL)· 17 Feb 2026verified |
| Short-term debt | 9.9 m | 11.3 m | 710.6 m | 12.1 m | 314.5 m | 18.3 m | SEC (XBRL)· 17 Feb 2026verified |
| Current liabilities | 701.3 m | 827.1 m | 1.6 bn | 1.0 bn | 1.3 bn | 1.2 bn | SEC (XBRL)· 17 Feb 2026verified |
| Total liabilities | 2.0 bn | 2.4 bn | 2.8 bn | 2.5 bn | 2.7 bn | 2.9 bn | SEC (XBRL)· 17 Feb 2026verified |
| Equity | -17.1 m | -269.0 m | -203.1 m | 285.3 m | 850.2 m | 1.2 bn | SEC (XBRL)· 29 Apr 2026verified |
Cash flow · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Operating cash flow | 612.4 m | 515.5 m | 302.3 m | 736.2 m | 945.7 m | 757.6 m | SEC (XBRL)· 17 Feb 2026verified |
| Capex | 78.5 m | 106.8 m | 101.1 m | 250.2 m | 163.6 m | 118.8 m | SEC (XBRL)· 17 Feb 2026verified |
| Free cash flow | 533.9 m ≈ | 408.7 m ≈ | 201.2 m ≈ | 486.0 m ≈ | 782.1 m ≈ | 638.8 m ≈ | SEC (XBRL)· 17 Feb 2026derived |
| Investing cash flow | -79.7 m | -106.4 m | -103.0 m | -319.7 m | -174.4 m | -655.6 m | SEC (XBRL)· 17 Feb 2026verified |
| Financing cash flow | -441.8 m | -498.7 m | -174.1 m | -406.2 m | -418.6 m | -465.7 m | SEC (XBRL)· 17 Feb 2026verified |
| Dividends paid | 118.1 m | 126.5 m | 142.0 m | 153.4 m | 160.3 m | 173.0 m | SEC (XBRL)· 17 Feb 2026verified |
| Share repurchases | 100.0 m | 600.0 m | 300.0 m | 0 | 53.6 m | 482.3 m | SEC (XBRL)· 17 Feb 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating cash flow − Capex.
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
Risk
Valuation
olivLaw classification
Score: 81 / 100
A scoring methodology on indicators and valuation, not investment advice.
score >= 65 · margin_of_safety >= 0.15 · agreement in ['high', 'medium']
Closing price
04 Nov 2026Source: olivLaw, closing series
Market cap: 12.3 bn USD
Key indicators
Coverage and freshness
Score by group
- Balance sheet87
- Valuation73
- Quality95
- Growth64
- Returns84
Estimated value range
The combined range = the median of the valid methods' low, central and high values; it is not a probability interval and does not cover every result. Envelope of all methods: 327.08 – 577.05 USD.
Methods computed but outside the aggregate range: Dividend discount (DDM) (a small share of earnings is paid as dividends (capital returns through buybacks): the dividend model does not describe the value and stays outside the aggregate).
Valuation assumptions are editorial choices, not measured; beta is not measured.
Method ranges (USD per share)
— — Mid · ▏ Price
Valuation methods
- DCF (discounted cash flow)327.08 – 503.87 (Mid 395.79)WACC 9.2% · starting FCFF 885.2 m USD · terminal value share of EV 73%The WACC × g sensitivity gives the method's bounds; these are not probabilities.Reverse DCF: starting growth implied by the price (fading linearly to terminal growth, everything else fixed): -0.9%
- Peers: EV/EBITDAunavailable · not enough peers
- Peers: P/E541.45 – 577.05 (Mid 541.70)5 companies used · median multiple 25.1x · quartiles 25.1x – 26.8xAAON, ALH, HAYW, JCI, SXI
- Dividend discount (DDM)outside the aggregate66.36 – 89.25 (Mid 76.12)a small share of earnings is paid as dividends (capital returns through buybacks): the dividend model does not describe the value and stays outside the aggregate
Classification (SIC) comparables group by industry code, not by economic activity; the direct group is an editorial selection by activity. Members' multiples are on their own trailing twelve months, at their own latest close.
Assumptions (illustrative, editorial)
- Risk-free rate
- 4.3%
- Equity risk premium
- 5.0%
- Beta (default)
- 1.00
- Cost of equity
- 9.3%
- Terminal growth
- 2.5%
Factor scorecard
Attractive profile · Score 81/100
| Factor | Value | Score | Weight used |
|---|---|---|---|
| ROIC · Quality | 61.1% | 100 (vs peers) | 10% |
| Net margin · Quality | 13.8% | 80 (vs peers) | 6% |
| FCF conversion · Quality | 111.4% | 100 (on a fixed band) | 6% |
| Revenue CAGR 3Y · Growth | 3.3% | 27 (on a fixed band) | 8% |
| EPS CAGR 3Y · Growth | 18.0% | 100 (on a fixed band) | 8% |
| Net debt / EBITDA · Balance sheet | 0.2x | 100 (on a fixed band) | 10% |
| Interest coverage · Balance sheet | 16.2x | 100 (on a fixed band) | 6% |
| Current ratio · Balance sheet | 1.2x | 34 (on a fixed band) | 4% |
| P/E (TTM) · Valuation | 16.7x | 100 (vs peers) | 10% |
| EV/EBITDA · Valuation | 10.9x | 38 (on a fixed band) | 10% |
| FCF yield · Valuation | 6.8% | 85 (on a fixed band) | 8% |
| Shareholder yield (distributions) · Returns | 5.2% | 74 (on a fixed band) | 6% |
| Payout ratio (FCF) · Returns | 21.9% | 100 (on a fixed band) | 4% |
Score groups
- Balance sheet87/100 · 3/3 factors with a value
- Growth64/100 · 2/2 factors with a value
- Quality95/100 · 3/3 factors with a value
- Returns84/100 · 2/2 factors with a value
- Valuation73/100 · 3/3 factors with a value
Memo
LENNOX INTERNATIONAL INC (LII). Latest full fiscal year: 2025; data up to 2026-09-30.
Figures computed from the financial statements: revenue 5.2 bn USD in 2025; YoY growth -2.7%; net margin 13.8%; ROE 59.5%; net debt/EBITDA 0.2x.
The estimated value range is 434.26–540.46 USD per share (median of 2 methods, agreement: high); assumptions are illustrative. Against the central value of 468.74 USD, the price of 358.96 USD leaves a potential of 30.6% (value / price − 1) and a margin of safety of 23.4% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
olivLaw score 81/100, methodological classification: attractive profile (score, margin of safety and method agreement together; not a judgement of the right price). Not investment advice.
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
- ROIC: 61.1%
- Net margin: 13.8%
- FCF conversion: 111.4%
- EPS CAGR 3Y: 18.0%
- Net debt / EBITDA: 0.2x
- Interest coverage: 16.2x
- P/E (TTM): 16.7x
- FCF yield: 6.8%
- Shareholder yield (distributions): 5.2%
- Payout ratio (FCF): 21.9%
- The price is below the estimated value range
What contradicts it
- Revenue CAGR 3Y: 3.3%
Versus the vertical median
Industrial machinery and computer equipment (SIC 358x) · same industry group (3-digit SIC) · compared with 10 companies
Multiples and returns vs the median
Price rebased to 100 (monthly, 5 years)
Companies in the vertical
| Market cap | P/E | ROE | Net margin | Revenue YoY | 1A / 3A | |
|---|---|---|---|---|---|---|
| JCIJohnson Controls International PLC | 85.7 bn | 25.1 | 24.1% | 14.5% | +2.8% | +21% / +166% |
| CARRCarrier Global Corporation | 45.5 bn | — | -14.3% | -7.9% | −3.3% | +1% / +7% |
| LIILennox International Inc | 12.3 bn | 16.7 | 59.5% | 13.8% | −2.7% | −27% / −7% |
| MIDDThe Middleby Corporation | 5.8 bn | — | -16.2% | -13.9% | unavailable | +34% / +26% |
| AAONAaon, Inc. | 4.8 bn | 30.4 | 17.3% | 8.2% | +20.1% | −38% / −7% |
| ALHAlliance Laundry Holdings Inc. | 4.6 bn | 25.1 | 109.8% | 10.1% | +13.3% | −3% / unavailable |
| HAYWHayward Holdings, Inc. | 3.5 bn | 21.8 | 10.9% | 14.4% | +6.7% | +3% / +44% |
| SXIStandex International Corp | 3.0 bn | 26.8 | 15.3% | 12.5% | +12.8% | +3% / +88% |
| TNCTennant Co | 1.2 bn | 54.9 | 3.9% | 1.9% | −6.5% | −0% / −15% |
| TGENTecogen Inc. | 51.6 m | — | -77.5% | -42.3% | +19.7% | −77% / +94% |
| LBGJLi Bang International Corporation Inc. | 34.5 m | — | -16.6% | -9.1% | +2.9% | −100% / unavailable |
1- and 3-year price returns: for LII from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.
Estimated price (USD)
| Estimated price | Bear | Base | Bull |
|---|---|---|---|
| 1 years | 213.15 Total return -40% · Per year -40% | 377.06 Total return 7% · Per year 7% | 568.27 Total return 60% · Per year 60% |
| 3 years | 201.75 Total return -41% · Per year -16% | 402.05 Total return 17% · Per year 5% | 666.04 Total return 91% · Per year 24% |
| 5 years | 190.96 Total return -42% · Per year -10% | 428.71 Total return 27% · Per year 5% | 780.63 Total return 128% · Per year 18% |
- Exit P/E± 100.51
- Net margin± 70.36
- Annual revenue growth± 58.45
- Annual dilution± 5.91
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 29 Jul 2026; since then the company filed 8-K (28 Oct 2026 · results), 10-Q (28 Oct 2026).
In brief
Lennox International is a global leader in energy-efficient climate-control solutions, designing and selling heating, ventilation, air conditioning and refrigeration equipment through its Home Comfort Solutions and Building Climate Solutions segments. The company reported net sales of 5195.3 million USD in fiscal 2025, and in the second quarter of 2026 sales reached 1545.3 million USD, amid weak residential demand partly offset by the commercial segment.
SWOT
Strengths
- A recognized leadership position in energy-efficient solutions, with a broad dealer network and company-owned stores that provide market access.
- A diverse portfolio of brands and products that covers several price points and distribution channels.
- Demonstrated ability to defend margins through pricing and cost actions, which supported profitability even in periods of lower volumes.
Weaknesses
- Reliance on residential replacement demand and new construction conditions, which can fall sharply in difficult economic periods.
- Exposure to single-location plants and key suppliers, which could limit the ability to meet unusually high demand.
- Sensitivity to steel, aluminum and copper prices, which could raise production costs if they cannot be passed on to customers.
Opportunities
- Growing demand for heat pumps and efficient equipment, if efficiency regulations continue to tighten.
- Expansion into services and parts through acquisitions and partnerships, which could generate steadier recurring revenue.
- Stronger commercial activity, including refrigeration and data center cooling, if building investment recovers.
Threats
- Competition from larger, well-funded groups and low-cost producers, which could reduce market share.
- New tariffs and policy changes that could alter material costs and sourcing decisions.
- Weaker macroeconomic conditions, high interest rates and lower consumer confidence, which could delay investment in homes and buildings.
Risks
- Weak residential demandhigh
Residential volumes have declined and weak new construction remains a negative factor, which could weigh on segment profit.
- Material costs and tariffshigh
Prices of steel, copper and aluminum, together with tariffs, could raise production costs if they cannot be offset by higher prices.
- Weather sensitivitymedium
Unusually cool summers or warm winters could reduce demand for cooling or heating equipment.
- Concentration of production and suppliersmedium
Single-location plants and reliance on certain suppliers could interrupt deliveries in the event of disasters or logistical problems.
- Product liability and warranty claimsmedium
Warranty claims or product recalls could generate significant costs and affect the company's reputation.
Investment thesis
What would need to be true (bull case)
- If residential demand stabilizes, volumes could recover and support profit growth, especially given favorable price and mix.
- The commercial segment shows solid growth, and recent acquisitions extend the services and parts portfolio, which could generate steadier revenue.
- Operational efficiency and the transformation program could support long-term margins even if the market remains difficult.
What would break the thesis
- If weakness in the residential segment persists, profit could remain under pressure and investors could reassess the growth outlook.
- Tariff pressures and material costs could reduce margins if they cannot be fully passed on to customers.
- Competition from larger groups and low-cost producers could limit gains in market share.
What to watch
- Trend in residential sales and replacement volumesQ3 2026
- Delivery against the 2026 earnings per share guidance2026
- Effect of tariffs and refunds on production costsQ3 2026
- Integration of the Duro Dyne, Supco and Comfort-Aire acquisitionsnext 10-K
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 29 Jul 2026; since then the company filed 8-K (28 Oct 2026 · results), 10-Q (28 Oct 2026).
The business
Lennox designs, manufactures and markets a broad range of HVACR products for residential and commercial markets in North America, including furnaces, air conditioners, heat pumps and commercial refrigeration equipment. It sells through three channels: its direct network of independent dealers, independent distributors, and its company-owned Lennox Stores, which carry parts, supplies and equipment. Founded in 1895, the company supports its position through innovation, quality and a three-phase self-help transformation plan focused on margins. 1
The business is strongly seasonal, with higher sales in the second and third quarters when the cooling season in the U.S. and Canada drives peak demand for air conditioning. Replacement demand accounts for a substantial part of sales, and the rest comes from new construction. Weather can significantly affect volumes, and production costs depend on steel, aluminum and copper. 1
In October 2025 the company acquired Duro Dyne and Supco, which offer portfolios of HVAC parts and supplies, and in October 2023 it completed the acquisition of AES, active in light commercial services. Lennox also holds joint ventures with Ariston Group for water heaters and with Samsung for ductless equipment, extending its range without fully carrying the investment. 1
Segments
Home Comfort Solutions
The residential segment generated net sales of 3343.4 million USD in fiscal 2025, down 7%, driven by lower volumes partly offset by favorable price and mix. Segment profit was 728.5 million USD. In the second quarter of 2026 segment sales fell 7% again and profit dropped 12%, indicating persistent pressure from residential demand. 123
Building Climate Solutions
The commercial segment recorded net sales of 1851.9 million USD in fiscal 2025, up 5%, supported by favorable price and mix and acquisitions. In the second quarter of 2026 segment sales rose 24%, with organic growth of 15% driven by national account work and emergency replacement activity. 13
Market context
The North American HVACR market is sensitive to new construction cycles, interest rates and general economic conditions, while weather strongly influences replacement sales. Competition is intense, and in segments such as parts and distribution barriers to entry are low. Tariff pressures in 2026 changed material costs, and companies in the sector are assessing the impact on sourcing. 12
The commercial market benefits from emergency replacement activity and demand from data centers and food refrigeration, but it depends on the pace of building investment. In the second quarter of 2026 Lennox signaled improving commercial conditions, while the residential market remained difficult. 13
Trends
- U.S. tariffs on importsmixed
New tariff measures, including Section 232 duties on steel, copper and aluminum, could raise material costs, although Lennox recorded 30 million USD of tariff refunds in the second quarter of 2026. The net effect remains uncertain and depends on trade policy developments. 23
- Regulatory shift toward heat pumpstailwind
Changes in energy-efficiency and refrigerant regulations could favor heat pumps and efficient equipment, which might support product mix and pricing. The company cites investments in heat pump growth as part of its strategy. 1
- Weak residential demandheadwind
Residential demand remains under pressure from lower volumes and weak new construction, which affects the absorption of fixed costs. If interest rates and consumer confidence do not improve, this pressure could persist. 13
- Consolidation through acquisitionstailwind
Recent acquisitions, including Duro Dyne, Supco and Comfort-Aire, extend the parts and services portfolio and contribute to revenue growth. Their integration and return on investment remain to be monitored. 23
Competitive position
Competition covers product availability, reliability, energy efficiency, performance, service and price, with the weight of each factor varying by application. Significant competitors include Carrier, Trane, Daikin, Rheem and the Bosch Group in residential and commercial equipment, and Hussmann, Emerson and GEA in refrigeration. 1
The company warns that some competitors have greater financial resources and that entrants from low-cost regions could create cost advantages. In parts and distribution the competition is fragmented, and price pressure could affect margins. 1
- Carrier Global CorporationCARR
A major competitor in residential and commercial equipment and in refrigeration, with brands such as Carrier, Bryant and Heil. 1
- Trane Technologies plcTT
An important competitor in climate control under the Trane and American Standard brands, active in both residential and commercial segments. 1
- Daikin Industries, Ltd.
A manufacturer with the Daikin, Goodman and Amana brands, present in both segments of the North American market. 1
- Emerson Electric Co.EMR
A refrigeration competitor through the Copeland brand, important for compressors and commercial cooling systems. 1
Links, dependencies and risks
Who the company is tied to, from its own SEC filings (customers, suppliers, production, partners, competitors, countries, regulation), from the 5 %+ holders' statements (13D/13G) and from what other companies say about it. Click a node for its evidence; on a listed company the graph moves to it.
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News & filings
In the press
- Lennox is Down 38% and Trading at 52-Week Lows. Bargain or Value Trap?Yahoo Finance — News · 20 Sept 2026 · EN
The latest news item in our archive is from 20 Sept 2026; the newest SEC filing is from 02 Nov 2026. The press archive comes from the RSS feeds we follow and does not necessarily cover the latest event — the filings alongside do.
SEC filings
- Current report02 Nov 2026Departure or appointment of officers · Regulation FD disclosure · Financial statements and exhibits
- Quarterly report28 Oct 2026
- Current report28 Oct 2026Results of operations · Financial statements and exhibits
- Current report18 Sept 2026Departure or appointment of officers · Financial statements and exhibits
- Quarterly report29 Jul 2026
- Current report29 Jul 2026Results of operations · Financial statements and exhibits
- Current report28 May 2026Departure or appointment of officers · Shareholder vote
- Quarterly report29 Apr 2026
- Current report29 Apr 2026Results of operations · Financial statements and exhibits
- Proxy statement08 Apr 2026
Sources
- [1] Form 10-K, fiscal year ended 2025-12-31 · SEC / Lennox International Inc. · 17 Feb 2026
- [2] Form 10-Q, quarter ended 2026-06-30 · SEC / Lennox International Inc. · 29 Jul 2026
- [3] Form 8-K, results release (exhibit 99.1) · SEC / Lennox International Inc. · 29 Jul 2026
Figures computed by olivLaw from SEC filings and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.