- Lennox International Stock: Is Wall Street Bullish or Bearish?
May 13, 2026
Lennox International Inc. (LII), headquartered in Richardson, Texas, designs, manufactures, and markets products for the heating, ventilation, air conditioning, and refrigeration markets. Valued at $18.1 billion by market cap, the company sells its products and services through direct sales, distributors, and company-owned parts and supplies stores.
Shares of this leader in energy-efficient climate-control solutions have underperformed the broader market over the past year. LII has declined 14.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 26.6%. In 2026, LII’s stock is up 4.7%, compared to the SPX’s 8.1% rise on a YTD basis.
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Narrowing the focus, LII’s underperformance is also apparent compared to the State Street Industrial Select Sector SPDR ETF (XLI). The exchange-traded fund has gained about 24.3% over the past year. Moreover, the ETF’s 12.4% gains on a YTD basis outshine the stock’s single-digit returns over the same time frame.www.barchart.com
On Apr. 29, LII shares closed up by 4.5% after reporting its Q1 results. The EPS of $3.35 topped Wall Street expectations of $3.16. The company’s revenue was $1.14 billion, topping Wall Street forecasts of $1.07 billion. LII expects full-year EPS to be $23.50 to $25.
For the current fiscal year, ending in December, analysts expect LII’s EPS to grow 4.8% to $24.28 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing the forecast on another occasion.
Among the 20 analysts covering LII stock, the consensus is a “Moderate Buy.” That’s based on seven “Strong Buy” ratings, 11 “Holds,” one “Moderate Sell,” and one “Strong Sell.”www.barchart.com
This configuration is more bullish than a month ago, with six analysts suggesting a “Strong Buy.”
On May 4, JPMorgan Chase & Co. (JPM) analyst Patrick Baumann maintained a “Sell” rating on LII and set a price target of $522, implying a potential upside of 2.6% from current levels.
The mean price target of $564.67 represents an 11% premium to LII’s current price levels. The Street-high price target of $650 suggests an upside potential of 27.8%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
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- True North Boosts Flexible Bond Position by $6 Million Amid Rate Volatility
May 7, 2026
On May 7, 2026, True North Advisors disclosed in an SEC filing that it bought 151,556 shares of TCW Flexible Income ETF(NYSE:FLXR), an estimated $5.99 million trade based on quarterly average pricing.
What happened
According to a recent SEC filing, True North Advisors, LLC increased its holding in TCW Flexible Income ETF(NYSE:FLXR) by 151,556 shares during the first quarter of 2026. The estimated value of this purchase is $5.99 million, calculated using the average closing price for the quarter. At quarter-end, the position’s value rose by $5.83 million, a figure that incorporates both the purchase and price changes.
What else to know
Following this buy, the FLXR position now stands at 2.28% of 13F reportable AUM as of March 31, 2026. Top holdings after the filing include:
NYSE: LII: $76.95 million (8.8% of AUM) NASDAQ: AAPL: $76.04 million (8.7% of AUM) NYSEMKT: FNDX: $57.76 million (6.6% of AUM) NYSEMKT: SPY: $31.31 million (3.6% of AUM) NYSEMKT: AVDS: $29.39 million (3.4% of AUM) As of May 6, 2026, FLXR shares were priced at $39.23, up 6.6% over the past year; one-year alpha versus the S&P 500 was (24.8) percentage points. FLXR’s annualized dividend yield stood at 5.8% as of May 7, 2026.
ETF overview
Metric Value AUM $3.03 billion Dividend Yield 5.78% Price (as of market close May 6, 2026) $39.23 1-Year Total Return 6.57%
ETF snapshot
Investment strategy seeks a high level of current income with a secondary objective of long-term capital appreciation through a flexible, actively managed fixed income portfolio. The fund is structured as an ETF. Managed by TCW, the ETF targets investors seeking income and diversification within their fixed income allocation.
TCW Flexible Income ETF (FLXR) is an actively managed exchange-traded fund focused on generating attractive income by investing across a broad spectrum of fixed income instruments. The fund leverages TCW's expertise to dynamically allocate assets, aiming to optimize risk-adjusted returns and respond to changing market environments. Its flexible mandate and disciplined investment process position it as a competitive solution for investors seeking both income and diversification within their fixed income allocation.
What this transaction means for investors
True North Advisors manages over $5 billion for high-net-worth families and business owners. Adding nearly $6 million to a bond fund during Q1 2026—increasing their stake by over 40%—suggests they see opportunity where bond markets have been turbulent.
The TCW Flexible Income ETF gives managers freedom to shift across different types of bonds, credit quality levels, and even currencies based on where they spot value. That flexibility matters when the fixed-income landscape is choppy. The fund can move between high-yield debt, investment-grade corporates, or international bonds depending on conditions.
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Q1 saw inflation concerns push bond yields higher, which means bond prices fell. A sizable purchase during that period could reflect several views on where rates and bond prices are headed.
For investors considering flexible bond funds, the key question is whether you value active management enough to pay for it. These funds charge more than index bond funds because managers are making tactical calls about credit quality and duration. That flexibility can help during volatility, but only if the managers' calls prove right more often than wrong.
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True North Boosts Flexible Bond Position by $6 Million Amid Rate Volatility was originally published by The Motley Fool
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- Lennox International Inc. (LII) Presents at Oppenheimer 21st Annual Industrial Growth Virtual Conference Transcript
May 6, 2026 · seekingalpha.com
Lennox International Inc. (LII) Presents at Oppenheimer 21st Annual Industrial Growth Virtual Conference Transcript
- Lennox Opens 2026 Feel The Love® Nominations to Honor Community Heroes
May 4, 2026
Nominations are now open for individuals who give back to their communities and need support replacing critical home comfort systems
DALLAS, May 4, 2026 /PRNewswire/ -- Lennox (NYSE: LII), a leader in reliable home comfort solutions, today announced that nominations are open for the 2026 Feel The Love® program, sponsored by the LII Lennox Foundation. Through its trusted dealer network across the United States and Canada, Lennox will donate and professionally install new heating and cooling systems for individuals who are pillars of their communities and need dependable home comfort. Nominations are open through August 31, 2026, at FeelTheLove.com.
"Feel The Love reflects who we are at Lennox, deeply committed to people, craftsmanship, and doing what's right," said Sarah Martin, EVP & President of Lennox Home Comfort Solutions. "Each nomination represents someone who consistently shows up for others. Alongside our dealer partners, we're proud to help bring reliable, high‑quality comfort to their homes."
Now in its 17th year, Feel The Love is a cornerstone of Lennox's community impact efforts. Since the program began in 2009, Lennox and its dealers have donated and installed more than 3,100 heating and cooling systems, helping homeowners facing significant challenges.
This year's Feel The Love Installation Week will take place October 3–11. During that time, selected recipients will receive up to a full heating and cooling system at no cost, including high-efficiency Lennox Merit equipment like air conditioners, heat pumps, furnaces, and thermostats, installed by local dealers who donate their time and expertise. Nominees include educators, veterans, healthcare professionals, first responders, caregivers, and families navigating unexpected medical or financial hardships. In addition, 501(c)(3) nonprofits are also accepted as Feel The Love program nominees (though they must be able to take residential HVAC equipment).
Community members are encouraged to submit nominations for individuals who put others first and would benefit from safe, reliable, and energy‑efficient home comfort. To learn more or submit a nomination, visit FeelTheLove.com. Updates throughout the program will be shared on Lennox's Facebook, Instagram, and LinkedIn channels.
About Lennox
Lennox (NYSE: LII) is a leader in energy-efficient building solutions and is committed to creating healthier and more comfortable environments. Serving residential and commercial customers, the company delivers innovative heating, cooling, indoor air quality, refrigeration, and water heating systems. Through trusted products, parts, and services, and advanced technology, Lennox delivers connected solutions that support the full lifecycle of customer needs. Additional information is available at www.lennox.com. Media inquiries may be directed to PR@lennox.com.
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About Feel The Love®
Launched in 2009, Feel The Love is Lennox Residential HVAC's signature community-giving program. Each year, Lennox partners with local dealers and community members across the United States and parts of Canada to identify and support individuals who exemplify service to others and are in need of a helping hand. The LII Lennox Foundation proudly sponsors the Feel The Love program. Learn more at FeelTheLove.com.Lennox International Inc. corporate logo. (PRNewsFoto/Lennox International Inc.) (PRNewsfoto/Lennox International Inc.)Lennox Feel the Love Logo (PRNewsfoto/Lennox International Inc.)Cision
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- Lennox Opens 2026 Feel The Love® Nominations to Honor Community Heroes
May 4, 2026 · prnewswire.com
Nominations are now open for individuals who give back to their communities and need support replacing critical home comfort systems DALLAS, May 4, 2026 /PRNewswire/ -- Lennox (NYSE: LII), a leader in reliable home comfort solutions, today announced that nominations are open for the 2026 Feel The Love® program, sponsored by the LII Lennox Foundation. Through its trusted dealer network across the United States and Canada, Lennox will donate and professionally install new heating and cooling systems for individuals who are pillars of their communities and need dependable home comfort.
- LENNOX OPENS 2026 FEEL THE LOVE® NOMINATIONS TO HONOR COMMUNITY HEROES
May 4, 2026
NOMINATIONS ARE NOW OPEN FOR INDIVIDUALS WHO GIVE BACK TO THEIR COMMUNITIES AND NEED SUPPORT REPLACING CRITICAL HOME COMFORT SYSTEMS DALLAS, MAY 4, 2026 /PRNEWSWIRE/ -- LENNOX (NYSE: LII), A LEADER IN RELIABLE HOME COMFORT SOLUTIONS, TODAY ANNOUNCED THAT NOMINATIONS ARE OPEN FOR THE 2026 FEEL THE LOVE® PROGRAM, SPONSORED BY THE LII LENNOX FOUNDATION. THROUGH ITS TRUSTED DEALER NETWORK ACROSS THE UNITED STATES AND CANADA, LENNOX WILL DONATE AND PROFESSIONALLY INSTALL NEW HEATING AND COOLING SYSTEMS FOR INDIVIDUALS WHO ARE PILLARS OF THEIR COMMUNITIES AND NEED DEPENDABLE HOME COMFORT.
- Why Lennox International (LII) Reaffirmed Earnings but Raised Revenue Guidance After Q1 2026 Results
May 2, 2026
Lennox International recently reported its first-quarter 2026 results, with sales rising to US$1,135.1 million while net income and diluted EPS from continuing operations eased compared with a year earlier. The company also completed a long-running share repurchase program totaling about US$3.32 billion and maintained full-year 2026 earnings guidance while lifting revenue growth expectations to roughly 8%, highlighting confidence in its commercial strength and recent acquisitions. Next, we'll examine how reaffirmed earnings guidance alongside upgraded revenue growth expectations may influence Lennox International's broader investment narrative.
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Lennox International Investment Narrative Recap
To stay invested in Lennox International, you have to believe the company can convert its commercial strength, acquisitions and digital tools into resilient earnings, despite near term margin pressure and softer residential demand. The latest quarter supports that view on revenue but not yet on profit, and reaffirmed EPS guidance suggests the key short term catalyst remains execution in Building Climate Solutions. The biggest risk, in my view, is that persistent cost inflation and pricing pushback compress margins further. For now, this news does not materially change either.
The most relevant update here is management’s move to lift 2026 revenue growth guidance to about 8% while keeping EPS guidance unchanged at US$23.50 to US$25.00. That mix of higher top line ambition and steady earnings targets puts more weight on cost control, product mix and the R 454B transition as near term swing factors, directly tying into both the upside from pricing and digital tools and the risk that inflation and inventory decisions pressure profitability.
Yet behind the higher sales guidance, investors should be aware of the less visible risk that...
Read the full narrative on Lennox International (it's free!)
Lennox International's narrative projects $6.2 billion revenue and $1.1 billion earnings by 2028.
Uncover how Lennox International's forecasts yield a $555.69 fair value, a 6% upside to its current price.
Exploring Other PerspectivesLII 1-Year Stock Price Chart
While the baseline view focuses on steady gains, the most optimistic analysts were already penciling in about US$7.0 billion of revenue and US$1.2 billion of earnings by 2029, so this quarter’s guidance and margin trends could either support that faster growth story or push expectations closer to the more cautious outlook.
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Explore 2 other fair value estimates on Lennox International - why the stock might be worth as much as 21% more than the current price!
Form Your Own Verdict
Don't just follow the ticker - dig into the data and build a conviction that's truly your own.
A great starting point for your Lennox International research is our analysis highlighting 2 key rewards and 1 important warning sign 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.
Companies discussed in this article include LII.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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- Lennox International Inc. (NYSE:LII) Beat Earnings, And Analysts Have Been Reviewing Their Forecasts
May 2, 2026
As you might know, Lennox International Inc. (NYSE:LII) just kicked off its latest first-quarter results with some very strong numbers. Results were good overall, with revenues beating analyst predictions by 6.0% to hit US$1.1b. Statutory earnings per share (EPS) came in at US$3.35, some 6.7% above whatthe analysts had expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
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Taking into account the latest results, the most recent consensus for Lennox International from 19 analysts is for revenues of US$5.60b in 2026. If met, it would imply a satisfactory 6.6% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 6.7% to US$24.33. In the lead-up to this report, the analysts had been modelling revenues of US$5.49b and earnings per share (EPS) of US$24.30 in 2026. There doesn't appear to have been a major change in sentiment following the results, other than the small increase to revenue estimates.
See our latest analysis for Lennox International
It may not be a surprise to see thatthe analysts have reconfirmed their price target of US$563, implying that the uplift in revenue is not expected to greatly contribute to Lennox International's valuation in the near term. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Lennox International analyst has a price target of US$650 per share, while the most pessimistic values it at US$450. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. The analysts are definitely expecting Lennox International's growth to accelerate, with the forecast 8.9% annualised growth to the end of 2026 ranking favourably alongside historical growth of 6.2% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Lennox International to grow faster than the wider industry.
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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. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Lennox International analysts - going out to 2028, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Lennox International that you should be aware of.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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- Here Are Thursday’s Top Wall Street Analyst Research Calls: AbbVie, Equinix, GE Healthcare, Kratos Defense, Meta Platforms, Oneok, Palantir Technologies, Wingstop, and More
Apr 30, 2026
Quick Read
As expected, the Federal Reserve did not lower rates at its meeting, which is likely the last time we will see Jay Powell as Chairman. The Chairman said he expects the first-quarter gross domestic product to take a hit from the war with Iran. After another huge week for earnings, with over 170 companies reporting, things will start to wind down as we enter May. The analyst who called NVIDIA in 2010 just named his top 10 stocks and AbbVie wasn't one of them. Get them here FREE.
Pre-Market Stock Futures:
Futures are trading higher this morning after a messy Wednesday trading session that saw all major indices except the Nasdaq end lower, with the Nasdaq closing virtually unchanged at 24,603, up 0.04%. The combination of soaring oil prices, the Federal Reserve keeping interest rates unchanged for the third straight meeting, and bogged-down negotiations with Iran, which are keeping the Strait of Hormuz closed, all added to the selling pressure. The President said flat out that he will block Iran until it accepts the nuclear agreements they have presented. The S&P 500 finished the day almost unchanged as well, down just 0.04% at 7,135, while the Dow Jones Industrials closed the session at 48,861, down 0.57%. The biggest loser on Wednesday was the small-cap Russell 2000, which is still the leading index in 2026, finishing down 0.60% at 2,739.
Treasury Bonds:
Yields were up again across the Treasury curve on Wednesday, and Wall Street immediately pointed to the Federal Reserve's stance of holding rates steady despite the highest number of dissents among the voting Governors since 1992, which marked the highest level of policy opposition in almost 35 years. The 30-year long bond closed Wednesday at 4.99%, while the benchmark 10-year note was last seen at 4.42%.
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Oil and Gas:
The story of the day, of course, was oil leaping once again over the $100 mark in a big way, and moving back to the highest levels we have seen since earlier this month, but before that, the highest since the start of the war in Ukraine in 2022. President Trump's line in the sand with Iran over the nuclear issue sparked buying, and when it was all said and done, Brent Crude finished Wednesday at $120, up 7.81%, while West Texas Intermediate was last seen at $108.20, up 8.27%. Natural gas closed the day at $2.65, down 1.64%.
Gold:
Gold continued its losing streak, posting a sharp decline for a third straight session. This extends a broader period of weakness, with gold dropping 8 out of the past 12 sessions. The current downward trend is still being driven by a stronger U.S. dollar, rising Treasury yields, and profit-taking after the metal hit record highs in early 2026. Gold closed the session down 1.11% at $4,543.90, while Silver ended trading at $71.27, down 2.37% on the day. Investors itching to initiate gold positions or add to current holdings need to be patient, as the sought-after hedge continues to consolidate after a staggering five-year run that saw the spot price soar.
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Crypto:
Crypto markets experienced a mixed, very cautious trading day on Wednesday, marked by falling trading volumes, a slump in crypto-related stocks, and pressure from multiple macroeconomic factors. While Bitcoin held onto key support levels, the broader market showed signs of slowing demand, with investors acting cautiously ahead of Federal Reserve updates. While there was no surprise that the Fed held rates steady, the commentary from Chairman Powell, likely in his last address as Chairman, did not paint a glowing picture for the economy, at least in the short term. At 8 AM EDT, Bitcoin was trading at $75,940, while Ethereum was last spotted at $2,259.
24/7 Wall St. reviews dozens of analyst research reports daily to identify new investment ideas for both investors and traders. Some of these daily analyst calls cover stocks to buy. Other calls cover stocks to sell or avoid. Remember that no single analyst call should ever be used as a basis to buy or sell a stock.
Here are some of the top Wall Street analyst upgrades, downgrades, and initiations seen on Thursday, April 30, 2026.
Upgrades:
AbbVie(NYSE: ABBV) was upgraded to Buy from Hold at Bank of America, which bumped the target price for the stock to $234 from $226. Equinix (NASDAQ: EQIX) was upgraded to Strong Buy from Market Perform at Raymond James, which has a $1,2590 target for the data center behemoth. Lennox International (NYSE: LII) was raised to Buy from Hold at Vertical Research, which has set a $600 target price. Site One Landscape Supply (NYSE: SITE) was upgraded to Buy from Hold at Deutsche Bank, with a $160 target price. Teradyne (NYSE: TER) was upgraded to Overweight from Neutral at JPMorgan, with a $400 target price objective.
Downgrades:
GE Healthcare Technologies (NASDAQ: GEHC) was downgraded to Neutral from Buy at Goldman Sachs, which cut the target price for the stock to $65 from $781. Meta Platforms (NASDAQ: META) was cut to Neutral from Overweight at JPMorgan, which lowered the target price for the tech giant to $725 from $826. Oneok (NYSE: OKE) was downgraded to Sector Perform from Underperform at Scotiabank, with an $89 price target. Steel Dynamics (NASDAQ: STLD) was cut to Neutral from Buy at Bank of America, with a $250 target price. Wingstop (NASDAQ: WING) was downgraded to Neutral from Buy at Goldman Sachs, which slashed the target price for the shares to $190 from $290.
Initiations:
AeroVironment (NASDAQ: AVAV) was initiated with a Buy rating at Clear Street, with a $293 price target. Kratos Defense and Security Solutions (NASDAQ: KTOS) was initiated with a Buy rating at Clear Street with an $82 target price. Mistras Group(NYSE: MG) was initiated with a Buy rating at Roth Capital, with a $22 target. Palantir Technologies (NASDAQ: PLTR) was initiated with an Outperform rating at Oppenheimer, which has set a $200 target price for the stock. Sutro Biopharma (NASDAQ: STRO) was started with an Outperform rating at Mizuho, which has a $50 target for the shares.
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- Lennox International Q1 Earnings Call Highlights
Apr 30, 2026
Lennox International logo
Key Points
Q1 revenue $1.1B (+6% YoY) and adjusted EPS $3.35; the company reaffirmed full‑year adjusted EPS guidance of $23.50–$25.00 but saw segment margin fall to 14.4% (down 130 bps) largely due to manufacturing under‑absorption from production cuts and inventory normalization. Business divergence: Home Comfort Solutions (HCS) faced weakness (organic revenue down ~12%, volumes down ~21%), while Building Climate Solutions (BCS) delivered record performance with organic sales up 26%, volumes +17% and margin expansion of ~300 bps driven by emergency replacement demand and the R‑454B product transition. Management now expects about 5% cost inflation (vs prior 2%), flagged newly announced tariffs and commodity cost pressures with tariff impacts delayed to Q3 by FIFO accounting, expects inventory normalization by end of Q2, and plans roughly $250M of 2026 capex while Q1 free cash flow improved to a $39M use versus $61M a year ago. Interested in Lennox International, Inc.? Here are five stocks we like better.
3 Stocks With Analyst Revisions That Could Drive Earnings Surprises
Lennox International (NYSE:LII) reported first-quarter 2026 revenue of $1.1 billion, up 6% year over year, as management pointed to improving channel conditions and continued strength in its commercial business. CEO Alok Maskara said the company saw “growth initiatives gained traction and channel conditions stabilized,” though profitability was pressured by manufacturing under-absorption tied to production cuts and inventory normalization efforts.
Segment margin was 14.4% in the quarter, down 130 basis points, which Maskara attributed primarily to “the impact of factory under absorption.” Operating cash flow was $16 million, and adjusted earnings per share was $3.35. The company reaffirmed its full-year adjusted EPS guidance range of $23.50 to $25.00.
Management sees stabilization in residential, record performance in commercial
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In Home Comfort Solutions (HCS), Maskara said industry conditions “began to stabilize as expected.” He said the one-step channel remained pressured by weak new home construction, while sentiment improved in the two-step channel as distributors began restocking ahead of summer.
CFO Michael Quenzer said HCS revenue declined 10% year over year. He attributed a 2% contribution from M&A, while organic revenue declined 12%. Quenzer said one-step revenue was down about 10% and two-step down about 15%, with organic sales volumes down 21%—an improvement from a 32% decline in the fourth quarter of 2025. Quenzer also cited “mix and price realization” as a positive factor, driven primarily by the full conversion to new R-454B products, while product costs were a $23 million headwind due to materials inflation and under-absorption from lower production.
Story Continues
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In Building Climate Solutions (BCS), management highlighted strong execution and demand from emergency replacement and national accounts. Maskara said “emergency replacement momentum and disciplined execution contributed to record quarterly performance.” Quenzer reported organic sales up 26%, M&A growth up 12%, and profit margins expanding 300 basis points. Volumes rose 17%, and price/mix added 9% revenue growth driven by the full transition of light commercial products to R-454B refrigerant.
During Q&A, Maskara credited BCS performance to a combination of factors including productivity from a new factory, progress in emergency replacement with inventory positioned across the U.S., and improved stability at the Stuttgart operation supporting national accounts. He also said service and refrigeration businesses within BCS continued to perform strongly, noting refrigeration “continues to set records both in growth and profitability.”
Under-absorption pressure tied to production cuts and inventory normalization
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Quenzer said manufacturing under-absorption was a key profit headwind, noting that “if inventory levels normalize, the segment profit was negatively impacted by approximately $50 million of manufacturing costs under absorption,” while later clarifying in Q&A that under-absorption was $15 million in the first quarter. He said Lennox reduced production about 30% in Q1, and some absorption headwinds would continue into Q2, but he expects inventory normalization to be largely complete by the end of the second quarter.
Maskara emphasized the margin decline was driven by under-absorption rather than an inability to offset inflation. “We were able to offset inflation with and volume with pricing and efficiency,” he said, adding that as under-absorption becomes less of an issue, management expects margins to “go back to normal.”
Inflation, tariffs, and pricing actions shape updated revenue outlook
Management discussed rising costs from commodities, components, fuel, and tariffs, including newly announced Section 232 tariffs. Quenzer said the company is now expecting cost inflation of about 5% versus the prior expectation of 2%. He cited spot market moves since the prior guidance update, including aluminum up 25%, steel up 20% to 25%, diesel up 50%, and copper up 10% to 15%, adding that hedging and fixed contracts “delay some of that.”
Quenzer said that due to Lennox’s move to FIFO accounting, the company does not expect income statement impact from the new tariff rules until the third quarter. He also said both the cost and price impacts are expected to fall predominantly in the second half, with a price increase announced earlier in the week expected to begin showing partial impact later in the second quarter.
While adjusted EPS guidance was reaffirmed at $23.50 to $25.00, Quenzer said full-year revenue is now expected to grow about 8%, up from prior guidance of 6% to 7%. He attributed the increase to “modestly higher mix and price,” reflecting the recent pricing actions, annual price increases implemented earlier in the year, and carryover benefit from 2025 regulatory mix. Segment revenue expectations were updated to HCS growth of 4% (from 2%) and BCS growth of approximately 16%.
In response to analyst questions about competitive dynamics and price elasticity, Maskara said broad-based inflation impacts the industry and that the company does not see the cost environment putting Lennox at a competitive disadvantage. He added that Lennox took pricing “quite thoughtfully” and remains focused on not being “disadvantaged on share.”
Cash flow improves, capex remains focused on innovation and systems
Free cash flow in the first quarter was a $39 million use of cash, improving from a $61 million use in the prior-year quarter. Quenzer said that adjusting for approximately $30 million of higher capital expenditures year over year, operating cash flow improved by $52 million, helped by inventory growth of $60 million this quarter versus $210 million in the prior-year period.
Quenzer said inventory build focused on parts and specific SKUs to support fulfillment during the upcoming peak season, and the company expects inventories to moderate in the second half of the year. Management also reiterated a capital spending plan of approximately $250 million in 2026 to support priorities including innovation and training centers, digital capabilities, distribution network optimization, ERP modernization, and “targeted AI capabilities.”
During Q&A, Maskara said the ERP work is not a “massive big ERP” change and is primarily focused on moving recent acquisitions onto Lennox’s platform. He also described AI initiatives in pricing, demand planning/S&OP, and SG&A productivity, including call center and HR workflows and robotic process automation.
Product launches and channel commentary
Maskara highlighted new product introductions across commercial and residential, including the Strategos rooftop with heat pump technology, expanded residential heat pump offerings with cold-climate capability, compact air handlers for retrofit applications, and heat pump water heaters through the Ariston joint venture. He said the Supco and Duro Dyne parts and supplies integrations are supporting attachment-rate and portfolio expansion efforts.
On channel conditions, Maskara said Lennox has “no indication of any pre-buy” ahead of recent pricing or tariffs and described restocking as normal seasonal behavior. Quenzer added that warranty registration data suggests channel inventory “continues to be normal, especially on the one-step side.”
Maskara also addressed trends in replace-versus-repair, saying the company is hearing that conditions are “not getting worse,” with indications that deferred replacements may be returning as contractors become more confident after the refrigerant transition. “Definitely stable and some green shoots,” he said, citing improved dealer and consumer confidence.
Litigation comment limited to prepared statement
Asked about recent litigation against residential HVAC manufacturers, Maskara said Lennox is constrained in what it can say. He read a prepared statement: “The matter is pending legal complaint. The lawsuit contains only plaintiff’s allegation, and there has been no finding of wrongdoing. We dispute the accuracy of the allegation and will actively and vigorously defend our position through proper legal channels.”
About Lennox International (NYSE:LII)
Lennox International Inc is a global manufacturer of climate control products and services, principally serving residential and commercial heating, ventilation and air conditioning (HVAC) markets. The company designs, engineers and produces a range of products including furnaces, air conditioners, heat pumps, air handlers, packaged rooftop units and related controls and indoor air quality equipment. Lennox also supplies aftermarket parts and accessories and supports its product lines with technical service, training and warranty programs for dealer and distribution partners.
Originally founded in 1895 by Dave Lennox, the company has grown from its early roots into a multinational business with operations concentrated in North America and a presence in other international markets.
The article "Lennox International Q1 Earnings Call Highlights" was originally published by MarketBeat.
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