Lennox International Inc

LII

Air-Cond & Warm Air Heatg Equip & Comm & Indl Refrig Equip

Mkt Cap

$17.91B

PE

29.06

Debt

$1.176B

Cash

$45.7M

EV

$19.04B

FCF

$547.9M

Market Cap

$17.91B

P/E Ratio

29.06

Debt

$1.176B

Cash

$45.7M

EV

$19.04B

FCF

$547.9M

Charts data: {"Earnings":[{"time":"2014-12-30","value":205800000},{"time":"2015-12-30","value":186600000},{"time":"2016-12-30","value":277800000},{"time":"2017-12-30","value":305700000},{"time":"2018-12-30","value":359000000},{"time":"2019-12-30","value":408700000},{"time":"2020-12-30","value":356300000},{"time":"2021-12-30","value":464000000},{"time":"2022-12-30","value":497100000},{"time":"2023-12-30","value":590100000}],"Sales":[{"time":"2014-12-30","value":3367400000},{"time":"2015-12-30","value":3467400000},{"time":"2016-12-30","value":3641600000},{"time":"2017-12-30","value":3839600000},{"time":"2018-12-30","value":3883900000},{"time":"2019-12-30","value":3807200000},{"time":"2020-12-30","value":3634100000},{"time":"2021-12-30","value":4194100000},{"time":"2022-12-30","value":4718400000},{"time":"2023-12-30","value":4981900000}],"Net Margins":[{"time":"2014-12-30","value":0.06111540060580863},{"time":"2015-12-30","value":0.053815539020591795},{"time":"2016-12-30","value":0.07628514938488576},{"time":"2017-12-30","value":0.07961766850713616},{"time":"2018-12-30","value":0.09243286387394115},{"time":"2019-12-30","value":0.1073492330321496},{"time":"2020-12-30","value":0.09804353209873146},{"time":"2021-12-30","value":0.11063160153549033},{"time":"2022-12-30","value":0.10535350966429298},{"time":"2023-12-30","value":0.11844878460025292}],"Assets":[{"time":"2014-12-30","value":1764300000},{"time":"2015-12-30","value":1680200000},{"time":"2016-12-30","value":1760300000},{"time":"2017-12-30","value":1891500000},{"time":"2018-12-30","value":1817200000},{"time":"2019-12-30","value":2034900000},{"time":"2020-12-30","value":2032500000},{"time":"2021-12-30","value":2171900000},{"time":"2022-12-30","value":2567600000},{"time":"2023-12-30","value":2798300000}],"Stockholders Equity":[{"time":"2014-12-30","value":9000000},{"time":"2015-12-30","value":101600000},{"time":"2016-12-30","value":38000000},{"time":"2017-12-30","value":50100000},{"time":"2018-12-30","value":-149600000},{"time":"2019-12-30","value":-170200000},{"time":"2020-12-30","value":-17100000},{"time":"2021-12-30","value":-269000000},{"time":"2022-12-30","value":-203100000},{"time":"2023-12-30","value":285300000}],"ROE":[{"time":"2014-12-30","value":22.866666666666667},{"time":"2015-12-30","value":1.8366141732283465},{"time":"2016-12-30","value":7.310526315789474},{"time":"2017-12-30","value":6.1017964071856285},{"time":"2018-12-30","value":-2.3997326203208558},{"time":"2019-12-30","value":-2.4012925969447707},{"time":"2020-12-30","value":-20.83625730994152},{"time":"2021-12-30","value":-1.724907063197026},{"time":"2022-12-30","value":-2.447562776957164},{"time":"2023-12-30","value":2.068349106203996}],"ROA":[{"time":"2014-12-30","value":0.1897069659354985},{"time":"2015-12-30","value":0.18176407570527317},{"time":"2016-12-30","value":0.24393569277963983},{"time":"2017-12-30","value":0.26143272535025114},{"time":"2018-12-30","value":0.2803764032577592},{"time":"2019-12-30","value":0.3228168460366603},{"time":"2020-12-30","value":0.23542435424354244},{"time":"2021-12-30","value":0.2717896772411253},{"time":"2022-12-30","value":0.25556940333385264},{"time":"2023-12-30","value":0.2823499982132009}]}

Lennox International Inc., together with its subsidiaries, designs, manufactures, and markets a range of products for the heating, ventilation, air conditioning, and refrigeration markets in the United States, Canada, and internationally. It operates through three segments: Residential Heating & Cooling, Commercial Heating & Cooling, and Refrigeration. The Residential Heating & Cooling segment provides furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment and accessories, comfort control products, and replacement parts and supplies for residential replacement and new construction markets. The Commercial Heating & Cooling segment offers unitary heating and air conditioning equipment, applied systems, controls, installation and service of commercial heating and cooling equipment, and variable refrigerant flow commercial products for light commercial markets. The Refrigeration segment offers condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, and refrigeration rack systems for preserving food and other perishables in supermarkets, convenience stores, restaurants, warehouses, and distribution centers, as well as for data centers, machine tooling, and other cooling applications; and compressor racks and industrial process chillers. The company sells its products and services through direct sales, distributors, and company-owned parts and supplies stores. Lennox International Inc. was founded in 1895 and is headquartered in Richardson, Texas.

Sector

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9/30/23
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9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Lennox International Inc

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$547.9M	$584.9M	$623.4M	$663.1M	$704M	$746.1M	$789.2M	$833.3M	$878.3M	$923.9M	$970.1M	$9.701B
DCF		$508.6M	$471.3M	$436M	$402.5M	$370.9M	$341.2M	$313.3M	$287.1M	$262.6M	$239.8M	$2.398B
Value	$6.031B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 12%

Earnings Stability 93%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	5.4%	7.6%	8%	9.2%	11%	9.8%	11%	11%	12%	12%
ROA	18%	24%	26%	28%	32%	24%	27%	26%	28%	27%
ROE	180%	730%	610%	-240%	-240%	-2.1K%	-170%	-240%	210%	170%

What is the average Net Margin?

The average Net Margin over the past 5 years is +10.54%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +0.39%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +27.47%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -0.44%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is -462.36%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +118.04%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate reliability of earnings, and consideration about the future are more dependable.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	2.73	3.02	4.42	2.60	4.03	1.84	3.03	7.58	2.38	2.15
Debt Equity	7.01	21.47	20.02	-6.96	-6.88	-57.35	-4.60	-7.51	4.05	3.19
MIN
Graham Stability	-	-	100%	100%	100%	100%	100%	100%	100%	100%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 2.15.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 0.31.

What is the Graham’s Stability?

Graham’s Stability measure stands at 1.00.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	4.6%	5.1%	11%	5.6%	0.79%
Net Income	11%	10%	18%	19%	-0.049%
Stockholders Equity	33%	-	-	-	-500%
FCF	8.7%	4%	-3.1%	140%	-4.8%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +5.11%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +0.79%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +10.45%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -0.05%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is -.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -498.52%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +3.96%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -4.8%.