Lennox International Inc. (LII)

Lennox International's stock has been impacted by several key events in the past six months. The Q3 2025 earnings report revealed a 5% decrease in net sales year-over-year, totaling $1.43 billion, missing analyst expectations, although adjusted diluted EPS increased to $6.98, surpassing estimates. Following the Q3 earnings report, the stock price reached a new 1-year low, trading near its 52-week low of $485.47. Several analysts adjusted their ratings and price targets for LII after the Q3 earnings report. Lennox completed the acquisition of NSI Industries' HVAC Division for $550 million, expected to bolster Lennox's parts and accessories offerings and be accretive to earnings in 2026. Prior to the Q3 report, Lennox reported record second-quarter financial results, with revenue increasing 3% and adjusted EPS jumping 14%, leading the company to raise its full-year guidance at that time.

Demand for Lennox International's HVACR products and services is seasonal, influenced by weather patterns and regional climate control needs. Higher demand for heating products occurs during colder months, and cooling products during warmer months. The company's Q3 2025 earnings report highlighted soft demand and channel inventory rebalancing as factors impacting sales volumes. The transition to new refrigerant regulations also presented a challenge. The company's focus on energy-efficient solutions and heat pumps aligns with market trends and regulatory shifts.

Lennox International Inc. designs, manufactures, and markets climate control products for residential and commercial customers. It operates through Home Comfort Solutions, Building Climate Solutions, and Refrigeration segments, offering products like furnaces, air conditioners, heat pumps, and air quality products. For commercial use, they provide rooftop units, split systems, VRF systems, and building automation systems, along with refrigeration products for food preservation. The company focuses on innovation, sustainability, and customer-centric solutions, investing in research and development.

Lennox International has a global presence with distribution across North America, Europe, Asia-Pacific, and the Middle East. Manufacturing facilities are located in Mexico, the U.S., Canada, India, Germany, France, and Spain. Following the sale of its European commercial HVAC and refrigeration businesses in September 2023, Lennox International has primarily focused its operations on the North American market.

Lennox International has a strong brand reputation for quality and reliability in the HVAC industry. The Lennox brand is synonymous with these attributes, contributing significantly to residential HVAC market sales. Lennox has received several accolades, including Dealer Design Awards, the GOOD DESIGN® Award, and recognition as one of the "Best Companies to Work For" by U.S. News & World Report and one of the "Best Managed Companies of 2023" by The Wall Street Journal. Lennox also earned its third consecutive India Great Place to Work certification.

Institutional investors hold a significant portion of Lennox International Inc.'s shares, ranging from 69% to 77%. Major institutional owners include Vanguard Group Inc, BlackRock, Inc., Capital International Investors, Morgan Stanley, State Street Corp, Kayne Anderson Rudnick Investment Management Llc, Mather Group, Llc., and Geode Capital Management, Llc. John W. Norris, III, holds a 9.8% stake in the company. The top shareholders collectively own approximately 50-51% of the company.