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Lennox International Inc LII

Rating as of

Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Lennox Delivered a Strong Q2 Performance; Third Price Increase Announced to Combat Inflation

Analyst Note

| Brian Bernard, CFA, CPA |

We've maintained our $195 per share fair value estimate following Lennox International's second-quarter earnings release. Sales rebounded 32% over the pandemic-affected prior-year comparison (second-quarter 2020 revenue was down 14% year over year) as all three segments grew by at least 30%. Segment operating margin expanded 160 basis points to 17.9% and adjusted EPS increased 54% to $4.57.

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Company Profile

Business Description

Lennox International manufactures and distributes heating, ventilating, air conditioning, and refrigeration products to replacement (75% of sales) and new construction (25% of sales) markets. In fiscal 2020, residential HVAC was 65% of sales, commercial HVAC was 22%, and refrigeration accounted for the remaining 13% of sales. The company goes to market with multiple brands, but Lennox is the company’s flagship HVAC brand. The Texas-based company generates most of its sales in North America.

Contact
2140 Lake Park Boulevard
Richardson, TX, 75080
T +1 972 497-5000
Sector Industrials
Industry Specialty Industrial Machinery
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 10,300

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