Lennox International Inc. (LII) DCF Valuation
TGM's two-stage DCF values Lennox International Inc. (LII) between $133.30 and $256.66 depending on assumptions, with a base case of $184.52. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth), fading to 2.5% long-run; the discount rate (10%) reflects its beta.
What would today's price require?
$512.15 is justified only if free cash flow grows about +26.3% a year (fading to 2.5% long-run) at a 10% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 1.0%/yr | 11.0% | $133.30 |
| Base case | 4.0%/yr | 10.0% | $184.52 |
| Optimistic | 7.0%/yr | 9.0% | $256.66 |
| Analyst DCF (FMP) | independent reference — different model | $369.61 | |
Current Price
$512.15
Market-Implied Growth
+26.3%/yr
vs +1.4% 5Y actual
Model Scenario Range
$133.30 – $256.66
model output — not a price target
LII DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for LII (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $562.4M · 0.03B shares · net debt $1.7B
Estimated Fair Value
$196.41
-61.7% vs $512.15
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 4.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $512.15; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.0% | $255 | $271 | $289 | $310 | $337 |
| 9.0% | $213 | $223 | $235 | $250 | $266 |
| 10.0% | $180 | $188 | $196 | $206 | $217 |
| 11.0% | $155 | $161 | $167 | $174 | $181 |
| 12.0% | $135 | $139 | $143 | $148 | $154 |
About Lennox International Inc.
Lennox International Inc. is a global manufacturer and distributor specializing in heating, ventilation, air conditioning (HVAC), and refrigeration solutions. The company operates across three divisions: Residential Heating & Cooling, Commercial Heating & Cooling, and Refrigeration. Its Residential Heating & Cooling division supplies homeowners with systems like furnaces, air conditioners, and heat pumps, along with indoor air quality products, comfort controls, and replacement components, catering to both new construction and existing residential upgrades. The Commercial Heating & Cooling division serves the light commercial sector, providing unitary HVAC equipment, advanced applied systems, control technologies, and comprehensive installation and maintenance services, including variable refrigerant flow solutions. Lastly, the Refrigeration division delivers essential components such as condensing units, unit coolers, and industrial chillers. These are crucial for food preservation in retail, hospitality, and logistics (e.g., supermarkets, restaurants, warehouses), as well as for specialized cooling needs in data centers, machine tooling, and other industrial applications. The company distributes its offerings through direct sales, a network of distributors, and its proprietary parts and supplies retail locations. Established in 1895, Lennox International Inc. maintains its headquarters in Richardson, Texas.
- Sector
- Industrials
- Industry
- Construction
- CEO
- Alok Maskara