UBS Upgrades Lennox International (LII) to Buy

UBS upgraded Lennox International (NYSE: LII) from Neutral to Buy with a price target of $112.00 (from $95.00). Analyst Shannon O'Callaghan noted share gains.

"Lennox is the best play in our sector on U.S. residential air conditioning. Residential HVAC is Lennox's largest business (52% of sales), has strong margin improvement potential (2017 residential target margin range of 16-18% vs. 2014E of 13.3%), and continues to gain market share," said O'Callaghan.

"Unlike competitors such as Carrier, Trane, and York, all of which have other businesses much larger than residential HVAC, Lennox needs to win in residential HVAC for the company and the stock to work. Based on its aggressive and effective strategies to gain share in the U.S. residential HVAC market, it is clear to us that Lennox gets this. While a recovering housing market helps the story, 80% of residential HVAC sales are replacement, so more important than housing starts, in our view, are consumer confidence, employment, home equity, and consumer debt service levels, all of which we view as favorable," he added.

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 $96.94 yesterday.

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