Lennox's Commercial HVAC Business Initiatives Win Over KeyBanc Analyst, Upgrades Stock

  • KeyBanc Capital Markets analyst Jeffrey D. Hammond upgraded Lennox International Inc LII from Sector Weight to Overweight with a price target of $355.
  • The analyst expects the company's initiatives to boost utilization in its distribution footprint and drive higher non-equipment sales through the channel, leading to the generation of profitability.
  • Also, given LII's direct-to-dealer model, Hammond thinks LII will be safer than its peers amid de-stocking pressures.
  • The analyst applauds LII's move to enhance its Commercial HVAC business and sees plenty of scope for factory efficiency improvements, which can boost earnings going forward.
  • Hammond expects LII's formal guidance to increase following Q2 2023 earnings and see a consensus boost.
  • The analyst expects EPS of $5.27 (vs consensus: $5.17) in Q2 2023, $15.30 (consensus: $15.22) in 2023 and $16.85 (consensus: $16.68) in 2024. 
  • Price Action: LII shares are trading higher by 1.5% at $299.12 on the last check Tuesday.
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