Earnings Beat: Lennox International Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Investors in Lennox International Inc. (NYSE:LII) had a good week, as its shares rose 3.7% to close at US$476 following the release of its first-quarter results. Lennox International reported US$1.0b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$3.47 beat expectations, being 9.5% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Lennox International

After the latest results, the 16 analysts covering Lennox International are now predicting revenues of US$5.12b in 2024. If met, this would reflect a modest 2.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 15% to US$19.93. Before this earnings report, the analysts had been forecasting revenues of US$5.13b and earnings per share (EPS) of US$19.75 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of US$489, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Lennox International at US$564 per share, while the most bearish prices it at US$340. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Lennox International's revenue growth is expected to slow, with the forecast 3.7% annualised growth rate until the end of 2024 being well below the historical 7.1% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.5% per year. Factoring in the forecast slowdown in growth, it seems obvious that Lennox International is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Lennox International's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Lennox International. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Lennox International analysts - going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Lennox International .

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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.