Lennox International Inc. (LII)
Quantitative Summary
DeterministicAt 22.3x earnings — a 50% discount to the sector average of 44.7x — LII is in the lower valuation range. Financial health is average: Piotroski 5/9, Altman Z 7.6. DCF fair value of $190 implies 63% downside based on model assumptions. Beneish M-Score of -2.21 exceeds the -2.22 academic threshold — earnings quality may warrant further review.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedLennox International exhibits robust capital efficiency with an ROIC of 28.5%, yet its exceptionally high DuPont ROE of 69.3% is driven primarily by financial leverage rather than operational expansion, as evidenced by the equity multiplier of 3.51x outweighing contributions from net margins and asset turnover. While the Piotroski F-Score of 5/9 suggests moderate fundamental stability, the Beneish M-Score of -2.21 indicates a low probability of earnings manipulation, reinforcing confidence in the reported profitability metrics despite a recent revenue contraction of 2.7% year-over-year.
Valuation appears significantly compressed relative to both historical norms and sector peers, with the current P/E ratio at 20.0x standing well below the industrials average of 44.2x. This discount aligns closely with DCF-derived fair value estimates of $202 per share, implying that market pricing currently assumes limited growth potential absent a recovery in top-line revenue dynamics. The disparity between the company's high margin profile and its declining sales trajectory suggests the market is heavily weighting near-term cyclical headwinds over long-term operational resilience.
Insider activity presents a conflicting signal to these valuation metrics; while the low M-Score supports data integrity, net insider selling totaling $563,687 over the past 90 days introduces a cautionary element regarding management's immediate outlook or liquidity positioning. The convergence of depressed multiples against strong return on invested capital creates a scenario where downside protection may be structurally embedded, yet execution risks remain tied to reversing negative revenue momentum and navigating elevated leverage levels inherent in the current DuPont decomposition.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of -3% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 9.8% | 11.8% | 13.8% |
|---|---|---|---|
| 2% | $227 | $174 | $139 |
| 3% | $256 | $190 | $149 |
| 4% | $296 | $211 | $162 |
Center = base case. Green = >10% upside, Red = >10% downside vs $516.37.
Pre-computed DCF: WACC=11.8%, terminal growth 3%. Fair value $190 (-63.3%). Not investment advice.
Valuation Context
Currently trading 49% below its 5-year average P/E of 43.8x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedThe current technical configuration for Lennox International Inc. displays a price level of $526.33 within the Industrials sector, presenting a snapshot where larger market participants may be evaluating their positioning based on recent momentum shifts. The presence of Simple Moving Average crossovers often serves as a focal point for institutional algorithms and trend-following funds, potentially signaling transitions between accumulation or distribution phases depending on whether longer-term averages are crossing above or below shorter ones. While specific directional bias cannot be confirmed without the exact crossover dates or volume data in this isolated view, such technical patterns historically correlate with shifts in capital flow as sophisticated actors adjust exposure to align with perceived trend changes. Volume trends accompanying these price movements would typically offer critical insight into the conviction behind institutional activity; sustained trading at elevated levels near key support or resistance zones often suggests active positioning by major players rather than passive retail participation. If volume has been expanding alongside upward price action, it may indicate that larger entities are adding to existing holdings, whereas diverging volume patterns could imply a lack of fresh institutional interest despite apparent strength in the chart structure. The interplay between current valuation and these moving averages creates an environment where market depth is constantly being tested, reflecting how significant capital allocators might be balancing risk against potential upside within this industrial subsector.
Quant Health Deep Dive
Profitability & Value Creation
✅ Conservative payout — room for dividend increases.
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Dividend History
| Date | Amount | Change |
|---|---|---|
| 2026-03-31 | $1.3000 | 0.0% |
| 2025-12-31 | $1.3000 | 0.0% |
| 2025-09-30 | $1.3000 | 0.0% |
| 2025-06-30 | $1.3000 | +13.0% |
| 2025-04-30 | $1.1500 | 0.0% |
| 2024-12-31 | $1.1500 | 0.0% |
| 2024-09-30 | $1.1500 | 0.0% |
| 2024-06-28 | $1.1500 | +4.5% |
| 2024-03-27 | $1.1000 | 0.0% |
| 2023-12-28 | $1.1000 | 0.0% |
| 2023-08-30 | $1.1000 | 0.0% |
| 2023-06-29 | $1.1000 | +3.8% |
Dividend and split data from SEC filings and market data. Amounts are per share, not adjusted for splits. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like XHB or VBK, the fund manager is mechanically forced to buy or sell LII shares regardless of Lennox International Inc.'s individual fundamentals. We estimate $2.4B of passive capital is structurally linked to LII through 8 tracked ETFs. Index rebalances and ETF creation/redemption cycles can create noticeable volume spikes unrelated to company news.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in Lennox International Inc. to visualize passive redemption contagion across ETFs and collateral stocks.
If Lennox International Inc. (LII) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies CATERPILLAR INC (CAT) as the most exposed collateral stock, sharing 1 ETFs with LII. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 29 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
LII Ownership Dynamics
Passive funds hold 1 in every 7 LII shares, reducing daily market volatility.
Lennox International Inc. (LII) exerts measurable gravity on the passive index market, currently representing 3.3% of the XHB (XHB) and 0.5% of the VBK (VBK). Across 29 tracked ETFs, approximately 5M shares (14.5% of float) are held by passive funds and rarely trade on the open market. This level of passive ownership means index rebalances can create outsized volume events.
ETFs with Highest LII Exposure
Float lock-up computed from 29 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
LII Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for Lennox International Inc. over the past year sits near $489.29 (16% of 252-day volume). The current price of $516.37 trades 5.5% above this institutional floor — a sign of upside momentum, though a pullback to the POC zone is a common reversion target. The highly concentrated volume profile (16% at POC) indicates strong consensus on fair value — institutional participants have repeatedly transacted near this price.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
LII Capital Efficiency
How efficiently does Lennox International Inc. convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
Lennox International Inc. converts 55% of its EBITDA into free cash flow, a healthy conversion rate indicating efficient capital management — the business generates substantial cash after reinvestment. The positive ROIC-WACC spread of 16.8% confirms that reinvested capital creates shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-07 | 185 | $541.37 | $100,153.45 |
| 2026-05-06 | 928 | $522.20 | $484,601.6 |
| 2026-04-29 | 1,743 | $495.52 | $863,691.36 |
| 2026-04-28 | 144 | $502.24 | $72,322.56 |
| 2026-04-21 | 283 | $493.46 | $139,649.18 |
| 2026-04-20 | 4 | $487.11 | $1,948.44 |
| 2026-04-10 | 4 | $488.68 | $1,954.72 |
| 2026-04-01 | 22 | $464.13 | $10,210.86 |
| 2026-03-27 | 2,481 | $438.30 | $1.1M |
| 2026-03-26 | 2,224 | $481.68 | $1.1M |
| 2026-03-25 | 570 | $476.97 | $271,872.9 |
| 2026-03-24 | 29,110 | $476.96 | $13.9M |
| 2026-03-20 | 1,505 | $477.21 | $718,201.05 |
| 2026-03-18 | 758 | $486.98 | $369,130.84 |
| 2026-03-17 | 1,344 | $478.86 | $643,587.84 |
| 2026-03-16 | 5 | $480.96 | $2,404.8 |
| 2026-03-12 | 3,419 | $508.66 | $1.7M |
| 2026-03-10 | 5,263 | $516.96 | $2.7M |
| 2026-03-06 | 102 | $528.72 | $53,929.44 |
| 2026-03-05 | 1,735 | $550.67 | $955,412.45 |
| 2026-03-04 | 45 | $552.30 | $24,853.5 |
| 2026-03-03 | 5,708 | $563.40 | $3.2M |
| 2026-02-26 | 13 | $539.95 | $7,019.35 |
| 2026-02-19 | 7 | $553.89 | $3,877.23 |
| 2026-02-12 | 8,310 | $557.51 | $4.6M |
| 2026-02-09 | 4,515 | $529.98 | $2.4M |
| 2026-02-06 | 237 | $517.15 | $122,564.55 |
| 2026-02-04 | 24 | $508.49 | $12,203.76 |
| 2026-01-07 | 1,191 | $519.85 | $619,141.35 |
| 2026-01-06 | 125 | $503.90 | $62,987.5 |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| CARR | 0.696 | 0.744 | Moderate |
| MAS | 0.665 | 0.642 | Moderate |
| ITW | 0.651 | 0.634 | Moderate |
| AOS | 0.650 | 0.658 | Moderate |
| BLDR | 0.617 | 0.629 | Moderate |
| PPG | 0.614 | 0.619 | Moderate |
| SWK | 0.607 | 0.622 | Moderate |
| OC | 0.607 | 0.613 | Moderate |
| DOV | 0.596 | 0.595 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare LII to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.