NEW YORK (
-- Lennox International
) 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, notable return on equity and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.
Highlights from the ratings report include:
- Net operating cash flow has significantly decreased to -$148.30 million or 267.99% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The gross profit margin for LENNOX INTERNATIONAL INC is rather low; currently it is at 24.00%. It has decreased from the same quarter the previous year.
- LENNOX INTERNATIONAL INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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 increased its bottom line by earning $2.11 versus $1.08 in the prior year. This year, the market expects an improvement in earnings ($2.98 versus $2.11).
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Building Products industry and the overall market, LENNOX INTERNATIONAL INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- LII's revenue growth has slightly outpaced the industry average of 2.1%. Since the same quarter one year prior, revenues slightly increased by 6.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
Lennox International Inc., through its subsidiaries, engages in the design, manufacture, and marketing of a range of products for heating, ventilation, air conditioning, and refrigeration markets in the United States, Canada, and internationally. The company has a P/E ratio of 25.2, below the average consumer durables industry P/E ratio of 25.5 and above the S&P 500 P/E ratio of 16.7. Lennox International has a market cap of $2.8 billion and is part of the
industry. Shares are up 5.6% year to date as of the close of trading on Tuesday.
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