Lennox Going Into 2023 With An Iffy Mix Of Headwinds And Tailwinds

Writing about Lennox International (NYSE:LII) over a year ago, I wrote that I was more bullish on the short-term opportunities for the company than the Street, but found the valuation unappealing, and particularly so given some longer-term challenges. Since then, the company has indeed executed well on its residential HVAC opportunities, as well as refrigeration, but the shares are down about 20%, lagging the broader industrial group and most of its HVAC peers (Carrier (CARR) has done a little worse, Daikin (OTCPK:DKILY), Johnson Controls (JCI), and Trane (TT) have done better).

I do agree that the company is going into 2023 with price/cost tailwinds at its back, not to mention healthy ongoing trends in refrigeration, but I also still believe that the company’s lack of leverage to commercial HVAC (particularly outside the U.S.) is a meaningful headwind. Valuation is more reasonable now than before, but not what I’d call compelling yet.

 

Click here to continue: 

Lennox Going Into 2023 With An Iffy Mix Of Headwinds And Tailwinds