Lennox International Inc. (LII) $439.77
Lennox International is currently caught in a brutal technical downdraft, trading nearly 30% below its 52-week high despite maintaining a robust 19.5x P/E multiple.
52-wk High $616.5
📌 Investment Snapshot
- Current price of $439.77 sits just 6.9% above the 52-week low of $411.41.
- Q2 2026 revenue reached $1.55B with a strong EPS of $7.75, beating seasonal expectations.
- Severe technical breakdown confirmed by a 52.1 ADX, signaling an exceptionally strong downtrend.
- Analyst consensus remains a ‘Buy’ with a $511.15 mean target, implying double-digit recovery potential.
⏳ WAIT
LII is currently oversold on an RSI basis but lacks a definitive reversal candle to arrest the 18% monthly slide. The stock is trapped between a bullish FVG support and a heavy overhead volume gap.
| 📍 Entry Zone | $428.00 or below | 🛑 Stop-Loss | $409.00 |
| 📋 Adjust If | Price reclaims the $474.72 Value Area Low on high volume. | ||
The Investment Case — Why Now?
Over the last 90 days, Lennox has transitioned from a momentum darling to a victim of sector-wide industrial de-risking. While the June quarter showed record EPS of $7.75, the market is aggressively discounting a projected slowdown in residential HVAC replacements for late 2026. This disconnect between current earnings power and forward sentiment has created a valuation vacuum.
The primary risk centers on the 4.66% 10Y Treasury yield, which continues to pressure housing starts and high-ticket renovation spending. With a short interest of 9.0%, any fundamental miss in the October report could trigger a liquidity event toward the $400 psychological level. We need to see stabilization in the housing macro before committing fresh capital.
Does the current 19.5x multiple sufficiently compensate you for the risk of a prolonged downturn in residential construction?
🤔 Does the current 19.5x multiple sufficiently compensate you for the risk of a prolonged downturn in residential construction?
🏢 Company Overview
| Detail | Value |
|---|---|
| Sector | Industrials |
| Industry | Building Products |
| Dividend Yield | 1.24% |
| EPS (TTM) | $22.52 |
Open chart on TradingView →
📈 Price Action & Technicals
Outside VA
Buy-side Sweep at $535.02
LII is currently trading below both its SMA50 ($519.69) and SMA200 ($504.94), confirming a Death Cross environment that favors sellers on every rip. The price is hovering dangerously close to the Anchored VWAP of $435.73, which must hold to prevent a slide to the 52-week low.
The RSI at 26.4 screams oversold, yet the ADX of 52.1 reveals a trend strength that often overrides oscillators. This suggests that while a relief rally is due, it may be sold into quickly by trapped longs.
Volume Profile analysis shows the stock has fallen completely out of its Value Area ($474.72–$559.13), leaving a ‘air pocket’ above. The Point of Control at $492.31 now acts as a massive magnet and resistance level for any recovery attempt.
Recent liquidity sweeps near $535 indicate that institutional ‘smart money’ was exiting positions during the July distribution phase. We observe three distinct buy-side sweeps that failed to produce higher highs, a classic sign of institutional exhaustion.
Historically, when LII breaches its lower Bollinger Band ($386.52 is the current floor), it undergoes a 3-5% mean reversion. However, with the MACD histogram still expanding to the downside, the knife hasn’t hit the floor yet.
⚖ Peer P/E Comparison
| Ticker | Company | P/E (TTM) |
|---|---|---|
| LII | Lennox International | 19.5x |
| TT | Trane Technologies | 24.8x |
| CARR | Carrier Global | 18.2x |
| SPY | S&P 500 Avg | 21.4x |
💰 Earnings Deep Dive
| Period | Revenue | EPS | YoY |
|---|---|---|---|
| Q2 2026 | $1.55B | $7.75 | +8.4% |
| Q1 2026 | $1.14B | $3.37 | +5.2% |
| Q4 2025 | $1.20B | $4.08 | +3.1% |
| Q3 2025 | $1.43B | $7.01 | +6.7% |
Latest quarterly Free Cash Flow stands at $0.1B, which was entirely utilized for $0.1B in share buybacks, demonstrating management’s commitment to floor the stock price.
Lennox continues to deliver strong operational results, with Q2 EPS of $7.75 significantly outpacing the Q1 seasonal trough. However, the market is ignoring these trailing wins in favor of discounting future margin compression.
🚀 Growth Drivers — What Moves the Stock
- Commercial Retrofit Demand 🟢 Upside Surprise — Rising energy efficiency mandates are forcing commercial building owners to upgrade HVAC systems regardless of interest rates.
- Residential Replacement Cycle 🟡 Priced In — The massive install base from the 2010-2012 housing boom is reaching end-of-life, creating a steady floor for replacement parts.
🤔 Will the commercial retrofit boom be enough to offset a cooling residential market in 2027?
🏦 Smart Money & Institutional Positioning
13F Holdings
| Institution | Shares (K) |
|---|---|
| Blackrock Inc. | 2,971 |
| Capital International Investors | 2,862 |
| Viking Global Investors | 1,572 |
Holdings reflect most recent 13F (45-day lag).
Insider Transactions
| Name | Title | Date | Type | Shares |
|---|---|---|---|---|
| NORRIS JOHN W III | Director | 2026-05-28 | Purchase | 990 |
| BUCK SHERRY L | Director | 2026-05-21 | Purchase | 343 |
Short Interest
| Short % Float | Days to Cover |
|---|---|
| 9.0% | 5.6 |
⚠ Key Risk Factors
~$1.2B revenue risk
High volatility
🎯 Guidance & Wall Street View
Management has maintained full-year guidance but noted that ‘macroeconomic headwinds in residential’ remain a key monitorable for the second half of 2026.
| High Target | Mean Target | Low Target | Analysts | Consensus |
|---|---|---|---|---|
| $609.00 | $511.15 | $450.00 | 13 | Buy |
| Firm | Rating | Target | Date | Action |
|---|---|---|---|---|
| Goldman Sachs | Buy | $511.15 | 2026-07-31 | Maintained |
| RBC Capital | Sector Perform | $480.00 | 2026-07-30 | Maintained |
Analysts remain bullish on the long-term structural demand for HVAC, though recent price action has pushed LII below even the most conservative ‘Low’ price targets.
Open chart on TradingView →
📊 Bull vs Bear — Probability-Weighted Scenarios
🐂 Bull Case
- RSI divergence develops at $411 support.
- Fed signals a pivot, lowering the 10Y yield.
📊 Base Case
LII consolidates between $420 and $460 as the market waits for the October 28 earnings report to confirm margin stability.
🐻 Bear Case
- Breach of $411 leads to a liquidity flush.
- Residential HVAC volume drops >10% YoY.
🎯 Investor Action Plan — By Profile
Do not fight the 52.1 ADX trend strength. Wait for a daily close above the $442.77 filled FVG to signal that the immediate selling pressure has abated.
The technical confluence score of 70 is moderate, but the price is below the SMA200. Entry is preferred only if $427 support holds on a retest.
LII remains a high-quality industrial compounder. Current valuation at 19.5x is attractive relative to history, but macro headwinds suggest a better entry may lie ahead.
If you’re interested in the Industrials sector, also read:
❓ Investor FAQ — People Also Ask
Q: Why is Lennox stock falling despite good earnings?
The market is forward-looking and currently fears that high interest rates will significantly reduce HVAC demand in 2027, overshadowing the strong Q2 2026 results.
Q: Is the dividend safe?
Yes, with a payout ratio well supported by $22.52 in annual EPS and consistent free cash flow, the 1.24% yield is highly secure.
Q: What is the key technical level to watch?
The $411.41 level is the 52-week low and must hold. A break below this would likely trigger a move toward the $386 Bollinger Band floor.
📖 New to these terms? P/E Ratio · Free Cash Flow · Insider Signals · Stop-Loss · RSI
📊 Want to verify if this analysis still holds?
📋 Disclaimer
This analysis is for informational purposes only and does not constitute financial advice. Lennox International (LII) is subject to cyclical industrial risks and interest rate sensitivity.
All active positions and their real-time performance are tracked on our Investment Log.
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