Lennox International (LII)
NYSEIndustrialsIndustrial - MachinerySnapshot 2026-09-04
$390.53+1.15%
Close 2026-09-04 · 1-day change
NYSEIndustrialsIndustrial - MachinerySnapshot 2026-09-04
Broken: Primary pillar broken — Achieve at least 8% revenue growth in 2026: FY26 rev +8.0% vs 8.0% target; Q2 actual +3.0%.
Lennox grows revenue about 8% in 2026, with acquisitions adding 4%. It aims for EPS between $23.50 and $25.00 this year. Free cash flow is strong, targeted near $750 million. Capital spending is controlled around $250 million.
EPS fell from $3.63 to $3.35 in Q1 2026, showing pressure on profits. Guidance is soft, risking missing targets. Rising costs or weaker demand could hurt growth and cash flow.
The market prices in about 8% revenue growth and EPS near $24.50 for 2026. Our fair value is about 12% below the current price, reflecting cautious optimism. We see risks in EPS delivery but believe revenue growth and cash flow targets are achievable.
Breaks if: capital expenditures exceed $350 million in FY26
Breaks if: EPS falls below $23.5 for FY26
Breaks if: free cash flow falls below $550 million in FY26
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a durable compounder with a stable management team. However, the current thesis is under pressure due to elevated risks and mixed recent financial performance.
The market appears to price LII as cheap compared to its peers, reflecting a justified valuation given the current fragility in execution quality. There is a notable expectations gap, indicating that investors may be cautious about future performance.
Management is focused on achieving approximately 8% revenue growth in 2026, with recent results showing some alignment with this goal. However, the mixed status of EPS guidance and capital expenditures suggests that execution may remain inconsistent in the near term.
The thesis hinges on the performance of sector bellwethers like GEV, PH, and TT. If these companies continue to perform well, it could provide a favorable backdrop for LII. Conversely, any negative guidance from these peers could pose a risk to LII's performance.
The most important moves since the prior daily snapshot.
Mixed, the news cuts both ways. The latest earnings beat supports the read. However, the company cut its 2026 EPS guidance, which threatens the outlook. This guidance change directly impacts financial expectations.
as of 2026-09-04
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Breaks if: YoY revenue growth falls below 6% in FY26
Over the next 1 to 3 years, LII's outlook will depend on its ability to navigate sector challenges and improve execution quality. Not investment advice.