Shares of Lennox International, Inc. (LII) hit a new 52-week high of $85.65 on Dec 26 and eventually closed at $84.86. The share price of this diversified machinery company has been gaining momentum since the company raised its guidance for 2013.
Year-to-date, Lennox’s share prices recorded a healthy return of 57.4%. The company’s long-term estimated earnings per share growth rate is 22.3%. The average volume of shares traded over the last three months came in at 377.5K.
Growth Drivers
Lennox reported improved year-over-year results for the third quarter of 2013 with adjusted earnings per share of $1.30, up 34% year over year. The year-over-year rise was mainly due to higher volumes and price/mix.
Management has recently upgraded its guidance. Adjusted earnings per share for 2013 is expected in the range of $3.60 to $3.75 against the earlier projected range of $3.50 to $3.75. Revenue growth range was also hiked to 7%–8% from 6%–8%.
Additionally, the company expects to earn adjusted earnings per share in the range of $4.20 to $4.60 in 2014. Revenue growth in the range of 3% to 7% is predicted. While the company plans $90 million in capital expenditure, $150 million is allocated for stock repurchases.
The revision of 2013 guidance and initial projections for 2014 has triggered an upwards revision of the earnings estimates for Lennox. In the past seven days, the Zacks Consensus Estimate for 2013 has increased 0.8% to $3.67 while rising by 1.1% to $4.45 for 2014.
Other Stocks to Consider
Lennox currently carries a Zacks Rank #2 (Buy). Other stocks worth a watch in the industry include Comfort Systems USA Inc. (FIX), CaesarStone Sdot-Yam Ltd. (CSTE) and Nortek Inc. (NTK). While Comfort Systems and CaesarStone Sdot-Yam carry a Zacks Rank #1 (Strong Buy), Nortek holds a Zacks Rank #2.
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