Lennox Q2 revenue slightly misses estimates on residential weakness; cuts EPS guidance

Overview

• U.S. HVAC solutions maker's Q2 revenue rose 3% but slightly missed analyst expectations

• Adjusted EPS for Q2 was flat but beat analyst expectations

• Company lowered full-year EPS guidance to $23.00-$24.00 from prior range

Outlook

• Lennox cuts 2026 full-year EPS guidance to $23.00-$24.00 from $23.50-$25.00

• Company reaffirms 2026 revenue growth guidance at about 8%, including 5% from acquisitions

• Lennox maintains 2026 free cash flow outlook at $750 mln to $850 mln

Result Drivers

• COMMERCIAL SEGMENT GROWTH - Building Climate Solutions segment revenue rose 24% on broad-based strength, improved commercial market conditions, and acquisitions

• RESIDENTIAL WEAKNESS - Home Comfort Solutions revenue fell 7% due to lower sales volumes and continued softness in the residential market, partially offset by favorable mix-price and acquisitions

• ACQUISITION AND TARIFF IMPACT - Completed acquisitions and earlier-than-expected tariff refunds contributed to profit, helping offset inflation and lower factory absorption

Company press release: ID:nPn3DPdfQa

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 6 "strong buy" or "buy", 11 "hold" and 2 "sell" or "strong sell"

• The average consensus recommendation for the electrical components & equipment peer group is "buy."

• Wall Street's median 12-month price target for Lennox International Inc is $574.50, about 5.6% above its July 28 closing price of $544.11

• The stock recently traded at 21 times the next 12-month earnings vs. a P/E of 19 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)