Lennox International Inc. (LII)

FairStock Score: 51/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look at Lennox as a solid industrial franchise with a real product line in home and commercial comfort, but not a bargain on asset value. In fiscal 2025, the year ended 2025-12-31, it earned $805.8M on $5.2B of revenue; in fiscal 2024, the year ended 2024-12-31, it earned $811.1M on $5.3B. Diluted EPS edged from $22.66 to $22.79, so the latest annual comparison is flat rather than compounding. The longer record is better: FairStock's Lynch category is STALWART, citing 17.7% annual profit growth and 7.4% revenue growth over five years from filed annual results. Profitability is high—FairStock shows ROE of 71.76% and ROCE of 15.99%—and trailing free cash flow is $738.7M, a 5.8% FCF yield on the $12.7B market cap. The balance sheet is not lazy: debt/equity is 1.56, though FairStock's Altman Z of 4.83 and Piotroski 7/9 suggest reasonable financial strength. At the 2026-10-26 close of $365.64, FairStock's calculations put the P/E at 16.24, P/B at 9.74, EV/EBITDA at 12.83, and the Graham Number at $137.42, leaving a -173.62% margin of safety. That gap tells me the market is paying for brand, installed base, and cash returns, not book assets. I would want evidence that revenue and profit reaccelerate before calling the price comfortable.

In plain English: Lennox makes heating, ventilation, air-conditioning and refrigeration products for homes and businesses. The business is profitable and generates solid cash, but sales and profits have recently been roughly flat and it carries a fair amount of debt. At the current share price, the stock looks expensive compared with the company’s book value and a conservative fair-value estimate, though it is more reasonable compared with earnings and cash flow.

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Data as of 2026-10-26 close · note generated 2026-10-28 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q4 2025 10-K (period ended 2025-12-31) · fiscal Q3 2025 10-K (period ended 2025-09-30) · fiscal Q2 2025 10-K (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer