We’ve recently updated our valuation analysis.

Lennox International Valuation

Is LII undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for LII?

Other financial metrics that can be useful for relative valuation.

LII key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue2.3x
Enterprise Value/EBITDA14.7x
PEG Ratio2.5x

Price to Earnings Ratio vs Peers

How does LII's PE Ratio compare to its peers?

LII PE Ratio vs Peers
The above table shows the PE ratio for LII vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average12.3x
ALLE Allegion
17.5x13.2%US$8.1b
AOS A. O. Smith
15.1x4.7%US$7.8b
OC Owens Corning
6.9x-3.4%US$7.9b
FBHS Fortune Brands Home & Security
9.6x4.5%US$7.2b
LII Lennox International
17.2x6.8%US$8.1b

Price-To-Earnings vs Peers: LII is expensive based on its Price-To-Earnings Ratio (17.2x) compared to the peer average (12.3x).


Price to Earnings Ratio vs Industry

How does LII's PE Ratio compare vs other companies in the US Building Industry?

Price-To-Earnings vs Industry: LII is expensive based on its Price-To-Earnings Ratio (17.2x) compared to the US Building industry average (14.5x)


Price to Earnings Ratio vs Fair Ratio

What is LII's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LII PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio17.2x
Fair PE Ratio18.8x

Price-To-Earnings vs Fair Ratio: LII is good value based on its Price-To-Earnings Ratio (17.2x) compared to the estimated Fair Price-To-Earnings Ratio (18.8x).


Share Price vs Fair Value

What is the Fair Price of LII when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: LII ($228.76) is trading below our estimate of fair value ($386.8)

Significantly Below Fair Value: LII is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.


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