Lennox International Inc. (NYSE:LII) shareholders are probably feeling a little disappointed, since its shares fell 8.5% to US$344 in the week after its latest third-quarter results. Revenues were in line with forecasts, at US$1.6b, although statutory earnings per share came in 13% below what the analysts expected, at US$6.41 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, Lennox International's 17 analysts are now forecasting revenues of US$5.81b in 2027. This would be a modest 6.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 9.3% to US$23.97. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$5.93b and earnings per share (EPS) of US$26.21 in 2027. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.
Check out our latest analysis for Lennox International
The consensus price target fell 16% to US$372, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Lennox International at US$524 per share, while the most bearish prices it at US$350. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 5.2% growth on an annualised basis. That is in line with its 5.2% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 6.5% per year. So it's pretty clear that Lennox International is expected to grow slower than similar companies in the same industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Lennox International's future valuation.
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. We have estimates - from multiple Lennox International analysts - going out to 2028, and you can see them free on our platform here.
It is also worth noting that we have found 1 warning sign for Lennox International that you need to take into consideration.
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