Lennox International earned a pre-earnings upgrade Monday as analysts project next week's third-quarter report will heat up the HVAC products provider. LII stock advanced Tuesday.
Mizuho upgraded Lennox stock to a buy rating from neutral on Q3 earnings expectations and scaled up its price target to 460, up from 340. The research firm sees earnings potential "too pronounced to ignore" with strong internal momentum and execution for the Texas-based provider of climate control products for the heating, ventilation, air conditioning and refrigeration markets.
KeyBanc on Monday also raised its LII stock price target to 415, up from 400. Analyst Jeffrey Hammond maintained an overweight rating on Lennox International and raised its 2023 EPS estimate to $16.62 per share, up from $16.15 per share on expectations of supportive margins.
Lennox stock edged up 0.3% to 378.57 during Tuesday's market action. On Monday, shares gained 2% to 377.30. LII is up more than 56% on the year.
The optimistic views on Lennox International come as the company is poised to report third-quarter earnings and revenue on October 26. Analysts expect EPS to grow 15% to $4.72 with revenue increasing 3% to $1.28 billion.
HVAC Stocks Are Booming
The 11 stocks in the IBD-tracked Building-A/C & Heating Products industry group have collectively gained nearly 50% in 2023, outperforming the market by leaps and bounds. The group is fourth out of the IBD-tracked 197 industries for the year.
Lennox stock has formed a flat base with an official 393.02 buy point, according to MarketSmith. The stock has posted tight weekly closes over the past four weeks ahead of earnings, a sign that investors are holding steady.
Meanwhile, HVAC stock peer Modine Manufacturing was added to the IBD 50 list on Monday. MOD has surged 146% since hitting recent lows on May 24. Modine has also formed a flat base and is about 3% below a 49.60 buy point. Thinly traded Limbach Holdings has skyrocketed 172% in 2023.
Lennox stock has a 93 Composite Rating out of a best-possible 99. LII also has a 96 Relative Strength Rating and its EPS Rating is 93.
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