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 (NYSE: 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.
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Tags: J.P. Morgan & Co.