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    Is Lennox (LII) Using Buybacks to Offset Weaker EPS Guidance or Reinforce Its Long-Term Play?

    Simply Wall St·08/09/2026 09:35:25
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    • In the second quarter of 2026, Lennox International reported higher sales of US$1,545.3 million but essentially flat diluted EPS, while also completing a large share repurchase program totaling 16.72 million shares for US$3.45 billion since its October 2014 authorization.
    • The company’s decision to slightly lower full‑year 2026 EPS guidance to US$23.00–US$24.00, despite reaffirming about 8% revenue growth aided by acquisitions, highlights the pressure from weaker residential demand even as buybacks and bolt-on deals continue to support its longer‑term earnings profile.
    • Next, we’ll examine how the trimmed 2026 earnings guidance reshapes Lennox International’s longer-term investment narrative built around acquisitions and buybacks.

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    Lennox International Investment Narrative Recap

    To own Lennox International, you need to believe its core HVAC franchise, digital tools, and partnerships can offset periods of weaker residential demand and input cost pressure. The latest quarter supports that view only modestly: higher sales and ongoing buybacks helped hold EPS flat, but the slight cut to 2026 EPS guidance underscores that softness in residential replacements remains the key near term catalyst and the main risk, and the news does not fundamentally change that balance.

    The most relevant recent announcement is the completion of Lennox’s long running buyback program, with 16,720,924 shares repurchased for US$3,447.52 million since 2014. Against trimmed 2026 EPS guidance, this long term reduction in share count matters because it has been a key support for per share earnings even as residential volumes wobble, and it interacts directly with how much benefit investors may still reasonably expect from future capital returns as a catalyst.

    Yet behind the resilient EPS and completed buyback, investors should be aware that ongoing residential softness and elevated inventories could still...

    Read the full narrative on Lennox International (it's free!)

    Lennox International's narrative projects $6.9 billion revenue and $1.1 billion earnings by 2029. This requires 9.1% yearly revenue growth and an earnings increase of about $0.3 billion from $788.5 million.

    Uncover how Lennox International's forecasts yield a $539.23 fair value, a 23% upside to its current price.

    Exploring Other Perspectives

    LII 1-Year Stock Price Chart
    LII 1-Year Stock Price Chart

    Some of the lowest analysts were already cautious, assuming revenue around US$6.1 billion and earnings of about US$1.0 billion by 2029, and this new guidance cut could reinforce their concerns about slower growth and rising regulatory and competitive pressures compared with the more constructive narrative around digital tools and partnerships.

    Explore 4 other fair value estimates on Lennox International - why the stock might be worth as much as 49% more than the current price!

    Form Your Own Verdict

    Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.