Upside case
Bull case
$728+34.4%
LII would need investors to value it at roughly 30x earnings — about 8x more generous than today's 22x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewHoldUpdated May 1, 2026
Lennox International Inc. (LII) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Hold
Covering
30
analysts
10 bullish · 4 bearish · 30 covering LII
Strong Buy
0
Buy
10
Hold
16
Sell
4
Strong Sell
0
Consensus Target
$553
+2.2% vs today
Scenario Range
$302 – $728
Model bear to bull value window
Coverage
30
Published analyst ratings
Valuation Context
22.3x
Forward P/E · Market cap $18.8B
LII price targets
Three scenarios for where LII stock could go
Current
~$541
Confidence
65 / 100
Updated
May 1, 2026
Where we are now
Current · $541
Bear
$302
Base
$620
Bull
$728
Market caseClosest to today
Base case
$620+14.5%
At 26x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
$302-44.2%
If investor confidence fades or macro conditions deteriorate, a 10x multiple contraction could push LII down roughly 44% from where it trades now.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Lennox International Inc.
LII · NYSEIndustrialsConstructionDecember year-end
Lennox International is a manufacturer of heating, ventilation, air conditioning, and refrigeration equipment for residential, commercial, and industrial markets. It generates revenue primarily through three segments: Residential Heating & Cooling (~60% of sales), Commercial Heating & Cooling (~25%), and Refrigeration (~15%), selling equipment, systems, and replacement parts through distributors and contractors. The company's competitive advantage lies in its strong brand recognition in the HVAC industry, proprietary technology in high-efficiency systems, and established distribution network that creates switching costs for contractors and building owners.
Market Cap
$18.8B
Revenue TTM
$5.3B
Net Income TTM
$783M
Net Margin
14.9%
LII Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
92%Exceptional
12 quarters tracked
Revenue Beat Rate
67%Exceptional
vs consensus estimates
Avg EPS Surprise
+9.7%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 3 of 4Q3 2025
EPS
$7.82/$6.86
Revenue
$1.5B/$1.5B
Q4 2025
EPS
$6.98/$6.82
Revenue
$1.4B/$1.5B
Q1 2026
EPS
$4.45/$4.75
Revenue
$1.2B/$1.3B
Q2 2026
EPS
$3.35/$3.16
Revenue
$1.1B/$1.1B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2025 | $7.82/$6.86 | +14.0% | $1.5B/$1.5B | +2.0% |
| Q4 2025 | $6.98/$6.82 | +2.3% | $1.4B/$1.5B | -3.0% |
| Q1 2026 | $4.45/$4.75 | -6.3% | $1.2B/$1.3B | -5.8% |
| Q2 2026 | $3.35/$3.16 | +6.0% | $1.1B/$1.1B | +6.0% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$5.5B
+3.7% YoY
FY2
$5.6B
+2.3% YoY
EPS Outlook
FY1
$23.93
+7.0% YoY
FY2
$25.45
+6.3% YoY
Trailing FCF (TTM)$661M
FCF Margin: 12.6%
Next Earnings
—
Expected EPS
—
Expected Revenue
—
LII beat EPS estimates in 3 of 4 tracked quarters. A strong delivery record supports forward estimate credibility.
LII Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $5.2B
Product Mix
Latest annual revenue by segment or product family
Residential Heating and Cooling
64.4%
-6.5% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
Residential Heating and Cooling
64.4%
YoY unavailable
Tap, hover, or focus a slice to inspect segment detail.
Residential Heating and Cooling is the largest disclosed segment at 64.4% of FY 2025 revenue, down 6.5% YoY.
Residential Heating and Cooling is the largest reported region at 64.4%, with no year-over-year comparison yet.
LII Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Slightly Undervalued
Fair value est. $602 — implies +14.4% from today's price.
Upside to Fair Value
14.4%
potential upside
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
LII
24.4x
vs
S&P 500
25.2x
In line with benchmark
vs Industrials Trailing P/E
LII
24.4x
vs
Industrials
25.9x
6% discount
vs LII 5Y Avg P/E
Today
24.4x
vs
5Y Average
23.9x
In line with benchmark
Forward PE
22.3x
S&P 500
19.1x
+17%
Industrials
20.8x
+7%
5Y Avg
—
—
Trailing PE
24.4x
S&P 500
25.2x
-3%
Industrials
25.9x
-6%
5Y Avg
23.9x
+2%
PEG Ratio
1.27x
S&P 500
1.75x
-27%
Industrials
1.59x
-20%
5Y Avg
—
—
EV/EBITDA
18.6x
S&P 500
15.3x
+22%
Industrials
13.9x
+34%
5Y Avg
18.3x
+2%
Price/FCF
29.5x
S&P 500
21.3x
+38%
Industrials
20.6x
+43%
5Y Avg
32.0x
-8%
Price/Sales
3.6x
S&P 500
3.1x
+16%
Industrials
1.6x
+128%
5Y Avg
3.1x
+19%
Dividend Yield
0.91%
S&P 500
1.88%
-52%
Industrials
1.24%
-26%
5Y Avg
1.08%
-16%
| Metric | LII | S&P 500 | Industrials | 5Y Avg LII |
|---|---|---|---|---|
| Forward PE | 22.3x | 19.1x+17% | 20.8x | — |
| Trailing PE | 24.4x | 25.2x | 25.9x | 23.9x |
| PEG Ratio | 1.27x | 1.75x-27% | 1.59x-20% | — |
| EV/EBITDA | 18.6x | 15.3x+22% | 13.9x+34% | 18.3x |
| Price/FCF | 29.5x | 21.3x+38% | 20.6x+43% | 32.0x |
| Price/Sales | 3.6x | 3.1x+16% | 1.6x+128% | 3.1x+19% |
| Dividend Yield | 0.91% | 1.88% | 1.24% | 1.08% |
LII trades above S&P 500 benchmarks on 4 of 6 measured multiples — is elevated on some multiples, but competitive on others — a mixed valuation picture.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolLII Financial Health
Verdict
Strong
LII generates $661M in free cash flow at a 12.6% margin — 29.8% ROIC signals a durable competitive advantage · returns 3.6% of market cap to shareholders annually.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$5.3B
Revenue Growth
TTM vs prior year
-2.0%
Gross Margin
Gross profit as a share of revenue
33.1%
Operating Margin
Operating income divided by revenue
19.5%
Net Margin
Net income divided by revenue
14.9%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$22.37
Free Cash Flow (TTM)
Cash generation after capex
$661M
FCF Margin
FCF as share of revenue — the primary cash quality signal
12.6%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
29.8%
ROA
Return on assets, trailing twelve months
20.1%
Cash & Equivalents
Liquid assets on the balance sheet
$34M
Net Debt
Total debt minus cash
$2.0B
Debt Serviceability
Net debt as a multiple of annual free cash flow
3.1× FCF
~3.1 years to full repayment at current FCF run-rate
ROE
Return on equity, trailing twelve months
72.0%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
3.6%
Dividend
0.9%
Buyback
2.7%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$502M
Dividend / Share
Annualized trailing dividend per share
$4.93
Payout Ratio
Share of earnings distributed as dividends
22.0%
Shares Outstanding
Declining as buybacks retire shares
35M
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt).
Open full ratios pageLII Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 29, 2026
High Risk
Financial Health
Lennox International's balance sheet presents significant risks due to increased debt levels and a history of negative equity. Although leverage has improved, the rising debt remains a concern, indicating elevated financial risk.
High Risk
Market Demand and Economic Conditions
The company faces challenges related to HVAC end-market demand, influenced by sluggish residential construction and distributor destocking. These factors have contributed to revenue declines, impacting overall sales volumes and investor sentiment.
Medium
Technology and Innovation
Lennox has identified numerous risks in the 'Tech & Innovation' category, indicating potential challenges in developing and implementing new technologies. This could hinder the company's ability to adapt to industry changes or compete with innovative rivals.
Medium
Operational and Inventory Issues
Lennox has encountered challenges with inventory management and market softness, which have contributed to revenue declines. These operational inefficiencies may affect the company's ability to meet market demand effectively.
Medium
Valuation and Analyst Sentiment
Despite some positive segment performance, the stock has experienced price drops due to investors reassessing its valuation. Analysts have issued cautious ratings, with some maintaining 'Underweight' positions and lowering price targets.
Lower
Interest Rate Sensitivity
Lennox's financial performance is susceptible to fluctuations in interest rates, which can affect borrowing costs and bond prices. This sensitivity may impact the company's overall financial health and investment attractiveness.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why LII Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 29, 2026
Strong Financial Performance
Lennox International has demonstrated robust financial health, reporting record revenues with significant year-over-year increases in core revenue and adjusted earnings per share (EPS). The company's GF Score™ of 92/100 indicates strong potential for long-term returns.
Favorable Market Conditions
The company is benefiting from a positive market environment, including the end of destocking periods, anticipated lower interest rates, and an expected increase in home sales. These factors are projected to drive revenue growth across its residential HVAC, commercial HVAC, and refrigeration segments.
Strategic Growth Initiatives
Lennox International is actively pursuing growth through acquisitions, which have contributed to its market position and offerings. The company has also raised its full-year revenue guidance, reflecting confidence in its growth trajectory.
Operational Efficiency and Margin Expansion
Continued factory productivity is expected to lead to margin expansion. The company has highlighted successful operational milestones, such as the integration of acquisitions ahead of schedule.
Technical Indicators
LII stock has shown a bullish trend, trading above its 50-day and 200-day moving averages. There are also indications of bull flags confirming breaks above key price levels.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
LII Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$541.37
52W Range Position
42%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$434.06
+24.7% from the low
52-Week High
$689.44
-21.5% from the high
1 Month
+19.35%
3 Month
+2.15%
YTD
+8.5%
1 Year
-4.5%
3Y CAGR
+24.3%
5Y CAGR
+9.6%
10Y CAGR
+14.7%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
LII vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
22.3x
vs 30.2x median
-26% below peer median
Revenue Growth
+3.7%
vs +7.1% median
-48% below peer median
Net Margin
14.9%
vs 13.4% median
+11% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
LII LII Lennox International Inc. | $18.8B | 22.3x | +3.7% | 14.9% | Hold | +2.2% |
CAR CARR Carrier Global Corporation | $56.7B | 24.5x | +1.0% | 6.0% | Buy | -0.6% |
TT TT Trane Technologies plc | $108.0B | 32.9x | +8.2% | 13.4% | Hold | +6.2% |
JCI JCI Johnson Controls International plc | $87.6B | 30.2x | +3.7% | 18.9% | Buy | -3.6% |
ALL ALLE Allegion plc | $11.6B | 15.4x | +7.1% | 15.2% | Hold | +27.5% |
AAO AAON AAON, Inc. | $8.0B | 49.6x | +19.7% | 7.5% | Buy | +21.1% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
LII Dividend and Capital Return
LII returns capital mainly through $502M/year in buybacks (2.8% buyback yield), with a modest 0.94% dividend — combining for 3.7% total shareholder yield. The dividend has grown for 16 consecutive years.
Dividend SustainableFCF Well Covered
Total Shareholder Yield
3.7%
Dividend + buyback return per year
Buyback Yield
2.8%
Dividend Yield
0.94%
Payout Ratio
22.0%
How LII Splits Its Return
Div 0.94%
Buyback 2.8%
Dividend 0.94%Buybacks 2.8%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$4.93
Growth Streak
Consecutive years of dividend increases
16Y
3Y Div CAGR
7.2%
5Y Div CAGR
10.4%
Ex-Dividend Date
—
Payment Cadence
Quarterly
4 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$502M
Estimated Shares Retired
926.4K
Approx. Share Reduction
2.7%
Shares Outstanding
Current diluted share count from the screening snapshot
35M
At 2.7%/year, buybacks mechanically lift EPS even with flat earnings — each remaining share represents a slightly larger piece of the company.
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 2026 | $1.30 | — | — | — |
| 2025 | $5.05 | +11.0% | 2.9% | 4.0% |
| 2024 | $4.55 | +4.4% | 0.3% | 1.1% |
| 2023 | $4.36 | +6.3% | 0.1% | 1.1% |
| 2022 | $4.10 | +16.1% | 3.6% | 5.3% |
FAQ
7 questionsLII Investor Questions
Common questions answered from live analyst data and company financials.
01Is Lennox International Inc. (LII) stock a buy or sell in 2026?
Lennox International Inc. (LII) is rated Hold by Wall Street analysts as of 2026. Of 30 analysts covering the stock, 10 rate it Buy or Strong Buy, 16 rate it Hold, and 4 rate it Sell or Strong Sell. The consensus 12-month price target is $553, implying +2.2% from the current price of $541. The bear case scenario is $302 and the bull case is $728.
02What is the LII stock price target for 2026?
The Wall Street consensus price target for LII is $553 based on 30 analyst estimates. The high-end target is $650 (+20.1% from today), and the low-end target is $450 (-16.9%). The base case model target is $620.
03Is Lennox International Inc. (LII) stock overvalued in 2026?
LII trades at 22.3x times forward earnings. The stock's valuation is broadly in line with the broader market. Based on current multiples versus the peer group, the relative model signals slightly undervalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Lennox International Inc. (LII) stock in 2026?
The primary risks for LII in 2026 are: (1) Financial Health — Lennox International's balance sheet presents significant risks due to increased debt levels and a history of negative equity. (2) Market Demand and Economic Conditions — The company faces challenges related to HVAC end-market demand, influenced by sluggish residential construction and distributor destocking. (3) Technology and Innovation — Lennox has identified numerous risks in the 'Tech & Innovation' category, indicating potential challenges in developing and implementing new technologies. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Lennox International Inc.'s revenue and earnings forecast?
Analyst consensus estimates LII will report consensus revenue of $5.5B (+3.7% year-over-year) and EPS of $23.93 (+7.0% year-over-year) for the upcoming fiscal year. The following year, analysts project $5.6B in revenue.
06When does Lennox International Inc. (LII) report its next earnings?
A confirmed upcoming earnings date for LII is not yet available. Check the Earnings section above for the most recent quarterly report dates and forward estimates.
07How much free cash flow does Lennox International Inc. generate?
Lennox International Inc. (LII) generated $661M in free cash flow over the trailing twelve months — a free cash flow margin of 12.6%. LII returns capital to shareholders through dividends (0.9% yield) and share repurchases ($502M TTM).