# Lennox International (LII.US)

Canonical: https://gigainvestors.com/s/LII

Analysis as of: 2026-10-16T07:29:50.414Z. Financial observations: FY1998–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at a fair price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: yes.

Share price: $358.50 per share; close as of 2026-10-15.

Estimated value: low $246.46 per share, central $359.52 per share, high $422.58 per share. Buy at or below the central value $359.52 per share. Valuation as of 2026-10-16T07:29:50.414Z; scenarios are not confidence intervals.

Expected annual return: 10.0% at the stated quote. About 10.0% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 3 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 3

- Years with a net loss: 0

- Operating margin variation: 0.18×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.13×

- FY2018: 0.13×

- FY2019: 0.17×

- FY2020: 0.13×

- FY2021: 0.14×

- FY2022: 0.14×

- FY2023: 0.16×

- FY2024: 0.19×

- FY2025: 0.20×

- LTM to Jun 2026: 0.19×

### moat: pass

- ROIC, median of available years: 45.2%

- ROIC, second-lowest year: 38.8%

- Typical minus recent gross margin: -4.2 pp

- Typical gross margin (annual median): 29.0%

- Recent gross margin (lower of latest and 3-year median): 33.2%

- Years with nonpositive capital: 0

- Capital spending / revenue: 2.5%

- ROIC including acquisitions, ten-year median: 31.6%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 41.7%

- FY2018: 59.6%

- FY2019: 55.2%

- FY2020: 45.4%

- FY2021: 51.7%

- FY2022: 40.8%

- FY2023: 38.8%

- FY2024: 46.5%

- FY2025: 31.2%

- LTM to Jun 2026: 29.8%

### economics: pass

- Owner earnings / net income, 5-yr: 0.96×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $3.0B

- Net income, five-year total: $3.2B

- Return on incremental invested capital: 53.4%

- Working capital / revenue, annual change: 0.7 pp

- Working capital / revenue, change between three-year averages: 4.8 pp

- Working capital / revenue, final three-year average: 19.9%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 1.00×

- FY2023: 0.80×

- FY2024: 1.00×

- FY2025: 0.99×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 44.9% vs 38.8%

- Per-share earnings: 6.31 to 22.54 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -2.5%

- Ordinary dilution, 5-year annual growth: -1.7%

- Market cap gain: $10B

- Cumulative retained earnings: $3.5B

- Diluted shares, 10-year annual growth: -2.5%

- Diluted shares, 5-year annual growth: -1.7%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 17.2%

- Per-share value change: $16.23

- Per-share value, starting three-year median: $6.31

- Per-share value, ending three-year median: $22.54

- Buybacks concentrated in cheaper years (correlation): 0.42

- Average buyback yield: 3.1%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $650M

- Cumulative net income, 10 years: $4.9B

- ROIC, first three-year median: 44.9%

- ROIC, last three-year median: 38.8%

Chart: Earnings per share; fiscal year observations.

- FY2016: $6.31

- FY2017: $7.14

- FY2018: $8.73

- FY2019: $10.37

- FY2020: $9.23

- FY2021: $12.37

- FY2022: $13.89

- FY2023: $16.53

- FY2024: $22.54

- FY2025: $22.76

### accounting: pass

- restructuring or one-time charges in at least three of five years

- Sloan accruals: 1.2%

- Receivables to sales index (DSRI): 0.90×

- Restructuring years, last five: 4

- Stock compensation / operating cash flow: 3.8%

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.94×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.66×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -4.4%

- FY2017: -1.0%

- FY2018: -7.5%

- FY2019: 0.6%

- FY2020: -12.6%

- FY2021: -2.4%

- FY2022: 7.6%

- FY2023: -5.2%

- FY2024: -4.0%

- FY2025: 1.2%

## Holders

- [Andreas Halvorsen](https://gigainvestors.com/vg): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 46% since Nov 2024 · "LII Q2 Deep Dive: Residential Weakness and Guidance Cut Overshadow Commercial Gains" (finance.yahoo.com, Jul 2026) · sales -2.7%

Story as of 2026-10-16T09:59:04.345Z; price observation 2026-10-15.

Price needs cash profits to grow 7.4% a year for ten years

- 2025-05-11: LII Q1 Earnings Call: Tariff Impacts and Product Transitions Shape Outlook ([finance.yahoo.com](https://finance.yahoo.com/news/lii-q1-earnings-call-tariff-171602424.html))

- 2025-07-23: Lennox Q2 2025 slides: profit surges 11% as margins expand despite volume challenges ([investing.com](https://www.investing.com/news/company-news/lennox-q2-2025-slides-profit-surges-11-as-margins-expand-despite-volume-challenges-93CH-4147930))

- 2025-10-23: LII Q3 Deep Dive: Inventory Destocking and Weak Residential Demand Pressure Results ([finance.yahoo.com](https://finance.yahoo.com/news/lii-q3-deep-dive-inventory-053210014.html))

- 2026-04-29: Lennox forecasts ~8% revenue growth while reaffirming $23.50-$25 adjusted EPS amid ~5% cost inflation ([seekingalpha.com](https://seekingalpha.com/news/4581991-lennox-forecasts-8-percent-revenue-growth-while-reaffirming-23_50-25-adjusted-eps-amid-5?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2026-07-30: LII Q2 Deep Dive: Residential Weakness and Guidance Cut Overshadow Commercial Gains ([finance.yahoo.com](https://finance.yahoo.com/real-estate/articles/lii-q2-deep-dive-residential-190102336.html))

- 2026-09-03: Lennox International Faces Volume, Pricing Headwinds Into 2027, Morgan Stanley Says ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/lennox-international-faces-volume-pricing-152137025.html))

### Sales · FY2024–2025

sales -2.7%; source https://www.sec.gov/Archives/edgar/data/1069202/000106920226000028/lii-20251231.htm; observed 2026-02-17.

- FY2016: $3.6B 

- FY2017: $3.8B 

- FY2018: $3.9B 

- FY2019: $3.8B 

- FY2020: $3.6B 

- FY2021: $4.2B 

- FY2022: $4.7B 

- FY2023: $5.0B 

- FY2024: $5.3B 

- FY2025: $5.2B 

### Gross margin · FY2025

gross margin 33.4%; source https://www.sec.gov/Archives/edgar/data/1069202/000106920226000028/lii-20251231.htm; observed 2026-02-17.

- FY2016: 29.6% 

- FY2017: 29.3% 

- FY2018: 28.6% 

- FY2019: 28.4% 

- FY2020: 28.6% 

- FY2021: 28.3% 

- FY2022: 27.2% 

- FY2023: 31.1% 

- FY2024: 33.2% 

- FY2025: 33.4% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in building products & equipment; annual sales are USD 5.2 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1069202/000106920226000028/lii-20251231.htm (filed 2026-02-17); FY2025: revenue 5195300000; grossProfit 1734800000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); LII.US: Lennox International Inc., together with its subsidiaries, designs, manufactures, and markets products for the heating, ventilation, air conditioning, and refrigeration markets in the United States, Canada, and internationally. The Home Comfort Solutions segment provides furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, and replacement parts and supplies; residential heating, ventilation, cooling equipment, and air conditioning; and evaporator coils, air handlers, and unit heaters under the Lennox, Dave Lennox Signature Collection, Armstrong Air, Ducane, AirEase, Concord, MagicPak, Advanced Distributor Products, Allied, Elite Series, Supco, Linebacker, Elite series, Merit Series, Comfort Sync, Healthy Climate, Healthy Climate Solutions, iComfort, ComfortSense, and Lennox Stores names. The Building Climate Solutions segment offers unitary heating and air conditioning equipment, controls, installation and service of commercial heating and cooling equipment, variable refrigerant flow commercial, curb, curb adapters, drop box diffusers, HVAC recycling, and salvage service. This segment also provides condensing units, unit coolers, fluid coolers, air cooled condensers, process chillers, compressorized racks, and replacement parts and supplies under the Lennox, Model L, CORE, Enlight, Xion, Energence, Prodigy, Strategos, Raider, Lennox VRF, Lennox National Account Services, Allied Commercial, Duro Dyne, Dyne-Tite, Durozone, Elite, AES Industries, Mechanical, Heatcraft Worldwide Refrigeration, Bohn, MAGNA, Larkin, Climate Control, Chandler Refrigeration, IntelliGen, and Interlink brands. The company also offers small package units, rooftop units, chillers, air handlers, and fan coils. It sells its products and services through direct sales, distributors, and company-owned parts and supplies stores. The company was founded in 1895 and is headquartered in Richardson, Texas.

### Why customers stay

Margins ranged from 31.1% to 33.4% during 2023–25; it earns 45.2% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2023: grossProfit / revenue = 31.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2024: grossProfit / revenue = 33.2%.

- Source: https://www.sec.gov/Archives/edgar/data/1069202/000106920226000028/lii-20251231.htm (filed 2026-02-17); FY2025: grossProfit / revenue = 33.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); 10-year return on capital observations [[2016,0.4494959372247617],[2017,0.41671317821799564],[2018,0.5959950303082681],[2019,0.5519076667977891],[2020,0.4539984740632196],[2021,0.5172061232927451],[2022,0.4076593824026409],[2023,0.38805913216094157],[2024,0.4646036792858034],[2025,0.3123714954377214]]; median 0.4517472056439906. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Reinvests 68.2% of cash earnings; earns 53.4% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2016: growth capex 17756314.77178052; upkeep 66543685.22821948; owner earnings 269356314.7717805. Growth capex / owner earnings = 0.06592128640765317.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2017: growth capex 20281233.243056893; upkeep 78018766.7569431; owner earnings 292281233.2430569. Growth capex / owner earnings = 0.06938944734159962.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2018: growth capex 4539911.840513855; upkeep 90660088.15948614; owner earnings 334339911.8405138. Growth capex / owner earnings = 0.013578731344164124.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2019: growth capex 0; upkeep 105600000; owner earnings 374200000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2020: growth capex 0; upkeep 78500000; owner earnings 350400000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2021: growth capex 34400000; upkeep 72400000; owner earnings 464000000. Growth capex / owner earnings = 0.07413793103448275.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2022: growth capex 23200000; upkeep 77900000; cash acquisitions 0; owner earnings 497100000. Growth capex plus acquisitions / owner earnings = 0.04667069000201167.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2023: growth capex 45634515.92972064; upkeep 204565484.07027936; cash acquisitions 94900000; owner earnings 471534515.92972064. Growth capex plus acquisitions / owner earnings = 0.29803654066050694.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2024: growth capex 65575809.36245954; upkeep 98024190.63754046; cash acquisitions 1800000; owner earnings 803975809.3624595. Growth capex plus acquisitions / owner earnings = 0.08380327937464627.

- Source: https://www.sec.gov/Archives/edgar/data/1069202/000106920226000028/lii-20251231.htm (filed 2026-02-17); FY2025: growth capex 0; upkeep 118800000; cash acquisitions 545000000; owner earnings 799500000. Growth capex plus acquisitions / owner earnings = 0.6816760475297061.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); Incremental return on capital 0.5339162829214646, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); Dividend observations: [[2016,69000000],[2017,79700000],[2018,93900000],[2019,110500000],[2020,118100000],[2021,126500000],[2022,142000000],[2023,153400000],[2024,160300000],[2025,173000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1069202/000106920226000028/lii-20251231.htm (filed 2026-02-17); FY2025: cash repurchases 501500000 USD.

### What could break it

"Cooler than Normal Summers and Warmer than Normal Winters May Depress Our Sales." (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/1069202/000106920226000028/lii-20251231.htm (filed 2026-02-17); Cooler than Normal Summers and Warmer than Normal Winters May Depress Our Sales.

### What the price says

The price assumes cash profits grow 7.4% yearly over ten years; actual growth was 18.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); Ten-year compound average after fade. Initial solved rate 0.11928423278372052. Price 358.5; FX 1; discount 0.1; same compounder ten-year fade to terminal 0.03. FY2015 owner earnings/share 4.092105263157895 → FY2025 22.584745762711865. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $145.89 per share

- 2016-11: $148.67 per share

- 2016-12: $153.17 per share

- 2017-01: $156.81 per share

- 2017-02: $164.62 per share

- 2017-03: $167.30 per share

- 2017-04: $165.39 per share

- 2017-05: $177.10 per share

- 2017-06: $183.64 per share

- 2017-07: $171.00 per share

- 2017-08: $165.73 per share

- 2017-09: $178.97 per share

- 2017-10: $191.13 per share

- 2017-11: $209.74 per share

- 2017-12: $208.26 per share

- 2018-01: $217.91 per share

- 2018-02: $204.63 per share

- 2018-03: $204.37 per share

- 2018-04: $193.37 per share

- 2018-05: $203.31 per share

- 2018-06: $200.15 per share

- 2018-07: $217.08 per share

- 2018-08: $222.81 per share

- 2018-09: $218.40 per share

- 2018-10: $210.89 per share

- 2018-11: $225.91 per share

- 2018-12: $218.86 per share

- 2019-01: $229.28 per share

- 2019-02: $245.25 per share

- 2019-03: $264.40 per share

- 2019-04: $271.45 per share

- 2019-05: $264.11 per share

- 2019-06: $275.00 per share

- 2019-07: $256.48 per share

- 2019-08: $253.78 per share

- 2019-09: $242.97 per share

- 2019-10: $247.36 per share

- 2019-11: $255.85 per share

- 2019-12: $243.97 per share

- 2020-01: $232.98 per share

- 2020-02: $228.13 per share

- 2020-03: $181.79 per share

- 2020-04: $186.68 per share

- 2020-05: $213.84 per share

- 2020-06: $232.99 per share

- 2020-07: $268.14 per share

- 2020-08: $280.33 per share

- 2020-09: $272.61 per share

- 2020-10: $271.66 per share

- 2020-11: $287.83 per share

- 2020-12: $273.97 per share

- 2021-01: $275.49 per share

- 2021-02: $279.77 per share

- 2021-03: $311.59 per share

- 2021-04: $335.34 per share

- 2021-05: $349.93 per share

- 2021-06: $350.80 per share

- 2021-07: $329.43 per share

- 2021-08: $335.18 per share

- 2021-09: $294.17 per share

- 2021-10: $299.28 per share

- 2021-11: $309.02 per share

- 2021-12: $324.36 per share

- 2022-01: $283.62 per share

- 2022-02: $266.93 per share

- 2022-03: $257.86 per share

- 2022-04: $213.19 per share

- 2022-05: $208.90 per share

- 2022-06: $206.59 per share

- 2022-07: $239.53 per share

- 2022-08: $240.12 per share

- 2022-09: $222.67 per share

- 2022-10: $233.57 per share

- 2022-11: $260.43 per share

- 2022-12: $239.23 per share

- 2023-01: $260.62 per share

- 2023-02: $254.83 per share

- 2023-03: $251.28 per share

- 2023-04: $281.91 per share

- 2023-05: $275.51 per share

- 2023-06: $326.07 per share

- 2023-07: $367.44 per share

- 2023-08: $376.81 per share

- 2023-09: $374.44 per share

- 2023-10: $370.54 per share

- 2023-11: $406.66 per share

- 2023-12: $447.52 per share

- 2024-01: $428.16 per share

- 2024-02: $471.21 per share

- 2024-03: $488.76 per share

- 2024-04: $463.42 per share

- 2024-05: $502.60 per share

- 2024-06: $534.98 per share

- 2024-07: $583.50 per share

- 2024-08: $590.19 per share

- 2024-09: $604.29 per share

- 2024-10: $602.57 per share

- 2024-11: $667.13 per share

- 2024-12: $609.30 per share

- 2025-01: $592.42 per share

- 2025-02: $601.05 per share

- 2025-03: $560.83 per share

- 2025-04: $546.75 per share

- 2025-05: $564.45 per share

- 2025-06: $573.24 per share

- 2025-07: $609.00 per share

- 2025-08: $557.86 per share

- 2025-09: $529.36 per share

- 2025-10: $505.00 per share

- 2025-11: $498.87 per share

- 2025-12: $485.58 per share

- 2026-01: $495.08 per share

- 2026-02: $569.94 per share

- 2026-03: $464.13 per share

- 2026-04: $534.89 per share

- 2026-05: $502.16 per share

- 2026-06: $572.95 per share

- 2026-07: $415.88 per share

- 2026-08: $382.64 per share

- 2026-09: $355.02 per share

- 2026-10: $358.50 per share

## Annual estimated value (USD per share)

- FY2016: low $64.22 per share, central $93.03 per share, high $109.31 per share

- FY2017: low $75.47 per share, central $109.92 per share, high $129.20 per share

- FY2018: low $101.50 per share, central $148.06 per share, high $174.03 per share

- FY2019: low $106.81 per share, central $155.81 per share, high $183.14 per share

- FY2020: low $93.87 per share, central $106.79 per share, high $124.00 per share

- FY2021: low $156.59 per share, central $228.43 per share, high $268.49 per share

- FY2022: low $188.10 per share, central $274.40 per share, high $322.53 per share

- FY2023: low $199.16 per share, central $290.54 per share, high $341.50 per share

- FY2024: low $237.06 per share, central $341.77 per share, high $400.17 per share

- FY2025: low $235.76 per share, central $343.92 per share, high $404.25 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:35:35.180Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1069202/000106920226000028/lii-20251231.htm); period 2025-12-31, filed 2026-02-17.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.