| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 64 | 16.3x | 17.8x | Around median | |
Growth | 51 | -2.1% | 7.1% | Around median | |
Quality | 82 | 29.0% | 4.5% | Top tier | |
Safety | 68 | 2.1x | 2.6x | Top tier | |
Capital Return | 40 | 1.38% | 2.12% | Around median | |
Momentum | 12 | -21.7% | 2.9% | Bottom tier | |
Sentiment | 85 | 16 | 3 | Top tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Lennox International operates in heating, ventilation, air conditioning, and refrigeration solutions, generating revenue through two integrated segments: Home Comfort Solutions for residential markets and Building Climate Solutions for commercial markets and refrigeration services. In its residential business, the company relies on a direct-to-dealer sales model alongside an indirect distribution channel, while the commercial business benefits from national accounts, emergency replacement, and equipment-related services. It also expands its offering of parts, accessories, and services through the Comfort-Aire, Century, and Coast-Air brands, in addition to the DuraDyne and Supco acquisitions completed in fiscal year 2025 and AES completed in fiscal year 2023.
In quarter 2 of fiscal year 2026, revenue increased 3% to $1.5 billion, and total segment profit increased 2% to $355 million, equivalent to a calculated margin of approximately 23.7% of revenue, while adjusted earnings per share remained stable at $7.72. The performance mix was clearly divergent: Home Comfort Solutions revenue declined 7% as units fell 12%, while Building Climate Solutions revenue increased 24%, including 12% organic growth and a 9% contribution from acquisitions. Price and mix supported revenue in each segment by approximately 3%, but weak residential volumes and factory absorption costs constrained profitability.
EDGAR filings show that quarter 1 of fiscal year 2026 generated revenue of $1.1 billion, gross profit of $351.3 million, net income of $117.2 million, and earnings per share of $3.35. On a trailing-twelve-month basis ending in fiscal year 2026, revenue reached $5.3 billion, gross profit $1.8 billion, net income $802.7 million, and earnings per share approximately $22.93. By comparison, fiscal year 2025 recorded revenue of $5.2 billion and net income of $805.8 million, indicating limited revenue growth with net profitability remaining approximately stable on a trailing-twelve-month basis.
The average analyst price target is $564, within a wide range of $469 to $650, and the stock carries a Neutral consensus; the average target is approximately 4% below the 52-week high of $587.27, while the highest target exceeds that peak. The wide target range reflects disagreement over whether Building Climate Solutions growth and free cash flow will offset the reduced earnings per share outlook and the delayed recovery in residential demand, while the downward revisions referenced in August 2026 warrant some caution toward the average target.
Figures in the text are as of 2026-08-29; the live price is shown at the top of the page.
Lennox lowered its adjusted earnings per share range to $23–24 after residential volumes came in below its expectations. It revised its Home Comfort Solutions growth outlook to approximately 1% instead of 4%, with volumes expected to decline at a high-single-digit rate during fiscal year 2026. It also lowered its productivity outlook to $60 million from $75 million due to weak factory cost absorption and the deferral of some material cost-reduction initiatives. In contrast, the company maintained its total revenue growth outlook at approximately 8% and free cash flow at $750–850 million.
In quarter 2 of fiscal year 2026, Home Comfort Solutions revenue declined 7% as units fell 12% and new residential construction revenue fell approximately 30%. The segment was affected by weak demand and higher absorption costs, in addition to Lennox exiting low- or negative-margin contracts. In contrast, Building Climate Solutions revenue grew 24%, including 12% organically and 9% from acquisitions. Commercial growth came from national accounts, emergency replacement, services, and the contribution from DuraDyne.
Automated analysis for informational purposes only — not investment advice.
The acquisition expands Lennox’s access to small and midsized distributors and adds equipment, accessories, and parts to its offering. Management expects it to add approximately one percentage point to the company’s revenue growth and two points to Home Comfort Solutions growth in fiscal year 2026. The company used approximately $200 million of debt to complete the transaction after quarter 2 of fiscal year 2026. Management is targeting a positive contribution to earnings per share during fiscal year 2027 through product integration and logistics and administrative expense savings.
The pace of unit declines improved from 21% in quarter 1 to 12% in quarter 2 of fiscal year 2026, but remained negative. Management said channel inventory had normalized and channel destocking had ended, while the company recorded a small gain in replacement market share during the twelve months preceding the July 29, 2026 call. Lennox expects Home Comfort Solutions volumes to grow at a low-single-digit rate during the second half of fiscal year 2026, particularly in the indirect channel. However, management expects the most significant portion of the benefit from the residential recovery to extend into fiscal year 2027.
Net debt to adjusted earnings before interest, taxes, depreciation, and amortization was 1.3 times at the end of quarter 2 of fiscal year 2026. The company achieved free cash flow conversion of 92% during the twelve months and maintained its fiscal year 2026 free cash flow outlook at $750–850 million. It also repurchased approximately $130 million of shares during the quarter and lowered its capital expenditure outlook to approximately $225 million from $250 million due to project timing. After the end of the quarter, it financed the Comfort-Aire and Century acquisition with approximately $200 million of debt.
