UPDATE: J.P. Morgan Downgrades Lennox International to Neutral, Reiterates $44 PT

In a report published Wednesday, J.P. Morgan & Co. downgraded its rating on Lennox International LII from Overweight to Neutral and reiterated its $44.00 price target. J.P. Morgan noted, “We view LII as an attractive way to play a recovery in HVAC markets, both near term and over a multi-year period as pent-up demand unwinds. We also believe current management has taken steps to improve the franchise through the downturn by investing in R&D, cutting costs, broadening sourcing, and streamlining the distribution strategy. Finally, we note LII's strong brands and captive distribution footprint, important in the context of a favorable industry structure with limited access from foreign competitors. Our Neutral rating is based primarily on a view that the current premium multiple already bakes in relative upside from the key US HVAC markets, making relative outperformance more challenging from here.” Lennox International closed on Tuesday at $44.46.