Lennox International Inc
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
$885.00 | Wxpbdn | Tygkkdz |
Lennox Is Poised for Another Strong Financial Performance in 2024
Business Strategy and Outlook
Lennox has capitalized on its efforts to gain market share and improve its cost structure against a backdrop of improving end-market demand. Its margin expansion story has been remarkable, with adjusted operating margins rising from about 8% during the last sales peak in 2007 to nearly 18% in 2023. We think its expanding distribution network and product portfolio have helped Lennox gain market share, while low-cost manufacturing and product sourcing and more cost-efficient product designs helped reduce its cost base. All the while, Lennox has maintained it premium brand standing that supports pricing power.