Yahoo Finance Lennox International Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
It's been a good week for Lennox International Inc. (NYSE:LII) shareholders, because the company has just released its latest first-quarter results, and the shares gained 3.7% to US$476. Lennox International reported US$1.0b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$3.47 beat expectations, being 9.5% higher than what the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for Lennox International
After the latest results, the 16 analysts covering Lennox International are now predicting revenues of US$5.12b in 2024. If met, this would reflect a credible 2.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 15% to US$19.93. In the lead-up to this report, the analysts had been modelling revenues of US$5.13b and earnings per share (EPS) of US$19.75 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$489, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Lennox International, with the most bullish analyst valuing it at US$564 and the most bearish at US$340 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Lennox International's revenue growth is expected to slow, with the forecast 3.7% annualised growth rate until the end of 2024 being well below the historical 7.1% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.5% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Lennox International.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Lennox International's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Lennox International going out to 2026, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for Lennox International that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
