Rating Change #9
Lennox International Inc (LII) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 3.1%. Since the same quarter one year prior, revenues slightly increased by 2.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- LENNOX INTERNATIONAL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, LENNOX INTERNATIONAL INC reported lower earnings of $1.73 versus $2.11 in the prior year. This year, the market expects an improvement in earnings ($2.50 versus $1.73).
- LII has underperformed the S&P 500 Index, declining 20.04% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The gross profit margin for LENNOX INTERNATIONAL INC is currently lower than what is desirable, coming in at 26.40%. It has decreased from the same quarter the previous year.
Lennox International Inc., through its subsidiaries, engages in the design, manufacture, and market of climate control products for the heating, ventilation, air conditioning, and refrigeration markets in the United States, Canada, and internationally. The company has a P/E ratio of 24.6, below the average consumer durables industry P/E ratio of 25.8 and above the S&P 500 P/E ratio of 17.7. Lennox International has a market cap of $2.17 billion and is part of the consumer goods sector and consumer durables industry. Shares are up 25.5% year to date as of the close of trading on Thursday.You can view the full Lennox International Ratings Report or get investment ideas from our investment research center.