Richardson, Texas-based Lennox International Inc. (LII) designs and manufactures a range of products for the heating, ventilation, air conditioning, and refrigeration markets. Valued at $22.3 billion by market cap, Lennox employs over 12,000 people globally and operates in the U.S., Canada, India, and Europe. The company is gearing up to release its fourth-quarter results before the market opens on Wednesday, Jan. 29.
Ahead of the event, analysts expect Lennox to report a non-GAAP profit of $4.12 per share, up 13.5% from $3.63 per share reported in the year-ago quarter. Moreover, the company has a robust earnings surprise history. It has surpassed Wall Street’s bottom-line estimates in each of the past four quarters. Its adjusted EPS for the last reported quarter surged 24.4% year-over-year to $6.68, exceeding analysts’ estimates by 12.3%.
For the full fiscal 2024, Lennox is expected to report an adjusted EPS of $21.10, up a staggering 17.5% from $17.96 in fiscal 2023. While in fiscal 2025, its earnings are expected to grow 10.7% year-over-year to $23.35 per share.
LII stock prices soared 43.7% over the past 52 weeks, significantly outperforming the Industrial Select Sector SPDR Fund’s (XLI) 18.4% gains and the S&P 500 Index’s ($SPX) 24.4% surge during the same time frame.
Lennox International’s stock prices rose 2.6% after the release of its impressive Q3 results on Oct. 23. The company observed significant organic growth and coupled with acquisitions its total net sales surged 9.6% year-over-year to $1.5 billion, which surpassed Street’s expectations by a notable 6.2%. Furthermore, Lennox demonstrated exceptional expense discipline which led to a massive 62.4% growth in operating income to a record $303.3 million.
Meanwhile, the company also observed significant growth in cash flow generation, its aggregate operating cash flows for the past three quarters surged 42.7% year-over-year to $613.3 million. Observing the solid momentum, Lennox raised its full-year revenues, earnings, and cash flow guidance which boosted investor confidence.
However, analysts remain cautious about the stock’s prospects, it has a consensus “Hold” rating overall. Out of the 17 analysts covering the stock, six recommend “Strong Buy,” eight suggest “Hold,” and three advise “Strong Sell” rating. Its mean price target of $632.93 represents a modest 1.2% upside potential from current price levels.
