Key Highlights

  • Lennox International (NYSE:LII) closed at USD 355.78 on October 19, 2026, down 0.55% and 4.5% above its 52-week low in published market data, with a market value of USD 12.3 billion and no company release dated that day.
  • Third quarter results are due before the open on October 28, 2026, with a call at 8:30 a.m. Central Time, after a July 30, 2026 report that cut 2026 adjusted EPS guidance to USD 23.00 to USD 24.00.
  • Second quarter sales were USD 1,545.3 million with net income of USD 269 million, and the stock fell 19.3% after the guidance cut, with residential demand weak and commercial demand stronger.
  • Morgan Stanley cut its target to USD 350 from USD 375 on October 15, 2026 with an Underweight rating, while Mizuho cut to USD 395 and Stephens to USD 500, and the FactSet mean target is USD 433.08.

Weak Housing Weighs on Volumes

No company release dated October 19, 2026 explains the 0.55% decline. Residential heating and cooling demand is tied to housing activity and consumer confidence. The 30-year mortgage rate averaged 7.40% last week according to Freddie Mac, pending home sales are at their lowest level since 2014 outside 2020, and the NAHB builder index fell to 29 in October, the lowest since June 2012 excluding the pandemic. Management said in July that residential weakness and elevated inventories could pressure volumes and margins. Builders are cutting prices, with 43% doing so in October 2026, the highest share in the 2020 to 2026 period, and buyer traffic is at its lowest since April 2012 excluding the pandemic, so demand for new-home equipment is also soft.

Guidance and Capital Return

After the July report Lennox International (NYSE:LII) reaffirmed about 8% revenue growth but trimmed 2026 adjusted EPS guidance to USD 23.00 to USD 24.00, and earnings per share was broadly flat in the second quarter. The company repurchased 259,899 shares for USD 132 million in the quarter and has retired more than 40% of its shares under a long-running authorization. Commercial demand is offsetting part of the residential weakness, which is the mix investors will track on October 28, 2026. Share repurchases cut the share count, which supports earnings per share even when profit is flat, but they do not fix volume weakness. The mix of segments is therefore central.

Risks and What to Watch

Morgan Stanley said it was updating estimates and valuation after a recent derating, and the average rating is Hold. The mean target of USD 433.08 sits about 22% above the quote (own arithmetic), but targets have been falling, from USD 600 to USD 500 at Stephens and USD 450 to USD 395 at Mizuho. Risks include prolonged weak housing, inventory destocking, input costs and tariffs. The next data points are the October 28, 2026 report and any change to full-year guidance. Estimate cuts ahead of results usually lower the bar, so a guide that holds could ease concerns, while a second guidance cut would likely widen the discount.

Where Things Stand

The shares sit near their low because residential HVAC demand follows housing, which is weak with mortgage rates near 7.4%, and because management cut its 2026 EPS guidance in July. Lennox International (NYSE:LII) has strong commercial demand and large buybacks, but analysts are lowering targets ahead of October 28, 2026. Guidance and the residential versus commercial mix will decide whether the cuts were enough. Residential volumes remain the key variable.