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Investing.com - JPMorgan raised its price target on Lennox International (NYSE:LII) to $592.00 from $549.00 on Friday, while maintaining an Underweight rating on the HVAC manufacturer’s stock. The stock, currently trading at $660.82, sits near its 52-week high of $689.44, with InvestingPro data indicating overbought conditions.
The price target increase follows Lennox’s second-quarter performance, which JPMorgan noted was better than expected. The stronger results were primarily driven by improved margins in the company’s Home Comfort Solutions (HCS) segment and higher volume in the Building Climate Solutions (BCS) division. The company’s financial health remains robust, with an "GREAT" overall score according to InvestingPro metrics, supported by a strong return on assets of 24.28%.
Despite the price target increase, JPMorgan maintained its cautious stance on the stock, pointing to concerning trends in Lennox’s residential business. The firm observed that residential volume trends are seasonally weak, with sell-through rates falling below normal seasonal patterns and declining year-over-year.
JPMorgan expressed particular concern about Lennox entering a challenging comparison period. The firm noted that the company now faces "their toughest comps in many years," which were driven last year by market share gains and customer pre-buying activity.
Both of these positive factors from the previous year are expected to normalize, according to JPMorgan’s analysis, potentially creating headwinds for Lennox’s performance in upcoming quarters despite the higher price target.
In other recent news, Lennox International reported impressive second-quarter earnings for 2025, surpassing analysts’ expectations. The company achieved an adjusted earnings per share (EPS) of $7.82, compared to the forecasted $6.86, representing a 13.99% surprise. Revenue also exceeded projections, reaching $1.5 billion against a forecast of $1.47 billion. Following these results, Lennox International raised its full-year guidance, signaling confidence in its future performance. Oppenheimer responded by increasing its price target for Lennox to $730 from $650, maintaining an Outperform rating. Similarly, Mizuho (NYSE:MFG) raised its price target to $650, citing the strong earnings beat and improved guidance. Both firms acknowledged the company’s robust performance despite challenging market conditions. These developments highlight the positive momentum for Lennox International in recent times.
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