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LII: Share Repurchases And AI Support Tools Will Drive Future Upside

AI Support Tools And Share Buybacks Will Shape Energy-Efficient HVAC Trends

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LII
AnalystConsensusTarget
Not Invested
Published 08 Aug 2024

Update shared on 08 Dec 2025

Fair value Decreased 0.42%
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AnalystConsensusTarget's Fair Value
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1Y
-24.3%
7D
0.5%

Narrative Update

Analysts have made a modest downward revision to their price target on Lennox International, trimming fair value by approximately 0.4 percent to about 571 dollars and 43 cents. This reflects slightly lower assumed revenue growth, partially offset by a marginally higher profit margin outlook and a similar forward valuation multiple.

What's in the News

  • Lennox International completed a major long-running share repurchase program, having bought back over 16.1 million shares in total for approximately 3.15 billion dollars, including 63,000 shares repurchased in the latest quarter for 36.95 million dollars (company buyback update).
  • The company lowered its full-year 2025 outlook and now expects revenue to decline by about 1 percent, signaling a more cautious view on near-term demand trends (corporate guidance).
  • Management reiterated that Lennox is actively seeking strategic bolt-on acquisitions aimed at strengthening distribution capabilities and broadening the product portfolio, while maintaining conservative leverage targets (management commentary on capital allocation).
  • Lennox accelerated its digital transformation with the rollout of AI-powered technical support tools for HVAC technicians and homeowners, already logging more than 15,000 sessions and achieving 96 percent positive feedback, with further capability upgrades planned (product and technology announcement).

Valuation Changes

  • The fair value estimate has edged down slightly to approximately 571 dollars and 43 cents from about 573 dollars and 86 cents, reflecting a modest downward revision in intrinsic value.
  • The discount rate has risen slightly from about 8.47 percent to roughly 8.51 percent, implying a marginally higher required return for shareholders.
  • The revenue growth assumption has fallen moderately from around 6.05 percent to about 5.39 percent, indicating a more cautious outlook on top line expansion.
  • The net profit margin forecast has risen modestly from roughly 15.57 percent to about 15.87 percent, pointing to a slightly improved profitability expectation.
  • The future P/E multiple has ticked down very slightly from about 24.34 times to roughly 24.26 times, suggesting little change in the valuation multiple applied to forward earnings.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.