At US$253, Is Lennox International Inc. (NYSE:LII) Worth Looking At Closely?

Lennox International Inc. (NYSE:LII), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Lennox International’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Lennox International

What Is Lennox International Worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 6.3% below my intrinsic value, which means if you buy Lennox International today, you’d be paying a fair price for it. And if you believe that the stock is really worth $270.17, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, Lennox International’s low beta implies that the stock is less volatile than the wider market.

What does the future of Lennox International look like?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 31% over the next couple of years, the future seems bright for Lennox International. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? LII’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on LII, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing Lennox International at this point in time. To that end, you should learn about the 3 warning signs we've spotted with Lennox International (including 2 which are potentially serious).

If you are no longer interested in Lennox International, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.