Lennox double-upgraded at Goldman Sachs as commercial margin improvement 'not done'
Goldman Sachs analysts double-upgraded shares of Lennox International Inc (NYSE:LII) to Buy from Sell with a new price target of $455 per share in a note Monday.
The analysts said in their broad-based note that they are raising the stock as Resi HVAC volumes are likely bottoming, the commercial margin improvement is not done, and because they expect the company to continue to beat going forward.
«Resi HVAC volumes are likely bottoming and favorable pricing tailwinds from the upcoming refrigerant change will help to drive stronger growth in 2024,» the analysts wrote.
«Additionally, we think Commercial margins will improve and our confidence in continued execution supports our above consensus estimates,» they added.
Goldman Sachs raised its second-half 2023 estimates, «largely driven by stronger Commercial profitability.»
«We also bake in higher 2024/2025 pricing on back of the refrigerant change which along with continued Commercial margin improvement takes our FY23/FY24/FY25 EPS to $17.30/$19.35/$21.50 (from $16.10/$17.10/$18.30),» said the analysts.
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