Is Lennox International's (LII) Upbeat Q3 and Raised Guidance Changing Its Investment Case?

• Lennox International (NYSE: LII) released its third quarter 2025 results in late July, reporting revenue growth of 3% and an 11% increase in operating income, while also raising full-year guidance for both revenue and adjusted earnings per share.
• This positive update was underpinned by expanded profit margins due to improved product mix and pricing, reflecting management's growing confidence in the company's operational performance and outlook.
• To understand the implications of management's increased full-year guidance and operational improvements, we'll explore how this latest performance shapes Lennox's investment narrative.

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Lennox International Investment Narrative Recap

Shareholders in Lennox International are typically betting on the company’s ability to drive earnings growth through premium pricing, strong distribution, and product innovation, while withstanding cost pressures and regulatory changes in the HVAC space. The recent Q3 results, highlighted by modest revenue growth and a more pronounced rise in operating income, reinforce confidence in management’s execution but do not meaningfully change the immediate outlook for the key catalyst, which remains the ramp in replacement demand and margin gains from product mix; however, the risk of weakness in residential new construction and shipment volumes due to macro pressures persists as the most important near-term challenge.

Among this year’s announcements, the upward revision of full-year guidance for both revenue and adjusted EPS stands out, as it aligns directly with the healthy Q3 margin expansion and improved product mix. This update strengthens the short-term investment narrative but also puts a sharper focus on the need to sustain volume momentum amid uncertain market conditions.

However, even as management raises guidance, investors should be aware of the ongoing risk posed by persistent softness in residential new construction and...

Read the full narrative on Lennox International (it's free!)

Lennox International's narrative projects $6.2 billion in revenue and $1.1 billion in earnings by 2028. This requires 4.7% yearly revenue growth and a $265 million earnings increase from $834.6 million today.

Uncover how Lennox International's forecasts yield a $636.81 fair value, a 21% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members provided two fair value estimates for Lennox ranging from US$531,000 to US$636,000, showing wide personal judgement. Against these differences, ongoing macro risks to core revenue highlight why your perspective matters.

Explore 2 other fair value estimates on Lennox International - why the stock might be worth just $531.40!

Build Your Own Lennox International Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Lennox International research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Lennox International research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Lennox International's overall financial health at a glance.

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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.

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