NEW YORK (TheStreet) -- Lennox International (LII) has been upgraded to "outperform" from "market perform," said Wells Fargo Monday. The firm also increased its estimates as the company is gaining market share.
Separately, TheStreet Ratings team rates LENNOX INTERNATIONAL INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate LENNOX INTERNATIONAL INC (LII) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, notable return on equity and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- LII's revenue growth has slightly outpaced the industry average of 3.1%. Since the same quarter one year prior, revenues slightly increased by 9.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 30.76% and other important driving factors, this stock has surged by 52.95% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, LII should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- LENNOX INTERNATIONAL INC has improved earnings per share by 30.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, LENNOX INTERNATIONAL INC increased its bottom line by earning $3.55 versus $2.64 in the prior year. This year, the market expects an improvement in earnings ($4.55 versus $3.55).
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Building Products industry and the overall market, LENNOX INTERNATIONAL INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The debt-to-equity ratio is somewhat low, currently at 0.83, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that LII's debt-to-equity ratio is low, the quick ratio, which is currently 0.62, displays a potential problem in covering short-term cash needs.
- You can view the full analysis from the report here: LII Ratings Report