Lennox International (LII) Stock Forecast & Price Target

Lennox International is forecasting a robust revenue growth of approximately 6% for its business segments, driven by various factors including volume and pricing improvements. In fiscal 2023, the company reported impressive organic sales growth of 20.4% year-over-year, significantly surpassing its prior estimates and consensus expectations, bolstered by strong performance in its HVAC segments. Furthermore, the company's earnings per share (EPS) has demonstrated consistent double-digit growth for eight consecutive quarters, reinforcing the positive financial trend and outlook for the company.

Lennox International has issued 2025 earnings per share guidance that is 2% below consensus at the midpoint, primarily due to a projected 5% core growth headwind linked to prebuy dynamics. The company's operating margins are anticipated to decline year-over-year as it navigates the refrigerant transition and the implications of the prebuy, raising concerns about future profitability. Furthermore, with the divestiture of its European HVAC and refrigeration businesses, Lennox now relies entirely on the North American market, which poses significant risks if economic conditions in that region deteriorate.