Lennox (LII) Building Blocks of Growth Remain the Same, Nomura Says

Nomura Securities analyst Jonathan Wright reiterated a Buy rating and $100 price target on Lennox International (NYSE: LII) following its Annual Investor meeting in New York.

Wright said, "Yesterday, Lennox hosted its Annual Investor meeting in New York. The company initiated FY15 EPS guidance of $5.20-5.60, capturing both our estimate ($5.50) and consensus ($5.44). Given the macroeconomic uncertainty, it was refreshing to see that LII’s strategy, and the majority of its slide deck, was unchanged from last year. Indeed, the key drivers of EPS growth are the same. As we had discussed in our initiation report, although the ~400bp decline in 2014 Refrigeration margin likely represents a trough, the rebound will be slow. Although U.S. industry shipments were up 14% in October, the weather has been warm in recent weeks (heating days down 25% y/y in the last three weeks) and management sounds cautious on Resi sales into year-end. We are also modestly lowering our 2015 estimate to account for $5M of incremental corporate expense."

FY14E EPS from $4.40 to $4.35; FY15E EPS from $5.50 to $5.45

For an analyst ratings summary and ratings history on Lennox International click here. For more ratings news on Lennox International click here.

Shares of Lennox International closed at $94.54 yesterday.

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