Morgan Stanley Starts Lennox International (LII) at Underweight

Morgan Stanley analyst Christopher Snyder initiates coverage on Lennox International (NYSE: LII) with a Underweight rating and a price target of $595.00.

The analyst comments: "We are initiating coverage on Lennox International at Underweight with a $595 PT. While LII has executed well and HVAC offers attractive secular exposure, we see negative cycle indicators for LII served markets (Resi + Light Commercial) which signals organic downside and is not reflected in valuation w/ shares trading at a 1 SDEV premium. We model 2025 organic ~200 bps below Cons on negative volumes behind a combination of tough comps + cycle pressure. While mix tailwinds from the 2025 refrigerant changeover will drive organic growth, this is ultimately a transitory uplift and we believe LII must demonstrate sustained volume outgrowth vs market to justify elevated valuation. Self-help initiatives could support market share trends vs historical under-growth, however, the challenge is that improvement is already reflected in both valuation & estimates. As such, we see negative risk-reward and initiate Underweight."

For an analyst ratings summary and ratings history on Lennox International click here. For more ratings news on Lennox International click here.

Shares of Lennox International closed at $612.71 yesterday.

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