Lennox International Inc. (LII), headquartered in Richardson, Texas, designs, manufactures, and markets products for the heating, ventilation, air conditioning, and refrigeration markets. Valued at $18.6 billion by market cap, the company sells its products and services through direct sales, distributors, and company-owned parts and supplies stores.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and LII perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the building products & equipment industry. LII excels in the HVACR industry with its flagship brand, known for quality and reliability. By focusing on North America, the company has streamlined operations and reinforced its market position, leveraging strong brand recognition and customer loyalty.
Despite its notable strength, LII slipped 24.2% from its 52-week high of $689.44, achieved on Jul. 23. Over the past three months, LII stock has declined 8.2%, underperforming the Industrial Select Sector SPDR Fund’s (XLI) 5% gains during the same time frame.
In the longer term, shares of LII dipped 14.3% on a YTD basis and fell 15.9% over the past 52 weeks, considerably underperforming XLI’s YTD gains of 15.6% and 13.1% returns over the same time frame.
To confirm the bearish trend, LII has been trading below its 50-day and 200-day moving averages since early August, with slight fluctuations.
On Jul. 23, LII shares closed up by 6.6% after reporting its Q2 results. Its revenue stood at $1.5 billion, up 3.4% year-over-year. The company’s adjusted EPS increased 14.5% from the year-ago quarter to $7.82.
In the competitive arena of building products & equipment, Trane Technologies plc (TT) has taken the lead over LII, showing resilience with 9.4% gains on a YTD basis and 5.3% returns over the past 52 weeks.
Wall Street analysts are cautious on LII’s prospects. The stock has a consensus “Hold” rating from the 18 analysts covering it, and the mean price target of $656.67 suggests an ambitious potential upside of 25.7% from current price levels.
