We expect Lennox International, Inc. LII to beat expectations when it reports third-quarter 2016 results on Oct 17 before the market opens.
Why a Likely Positive Surprise?
Our proven model shows that Lennox International is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at +4.02% for the stock. This is a meaningful and leading indicator of a likely positive earnings surprise for the company.
Zacks Rank: Lennox International carries a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank of #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating earnings.
The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
What is Driving the Better-than-Expected Results?
Lennox International engages in designing, manufacturing and marketing of climate control solutions. Its technologically advanced products are primarily used in the heating, ventilation, air conditioning and refrigeration end-markets.
Lennox International intends to generate higher revenues in the quarters head on the back of improved sales volume and favorable price/mix. Earnings in the to-be-reported quarter are estimated to be stronger due to increased revenues, improved operations and strategic cost-management initiatives. Also, the company remains committed toward rewarding its shareholders through dividends and share buybacks.
Lennox International has revised its adjusted EPS guidance to the range of $6.50-$6.90 per share for 2016, higher than the previously stated guidance of $6.30−$6.80. We believe that the guidance has been revised upward by the company on grounds of the bullish prospects of business.
Other Stocks to Consider
Argan, Inc. AGX, with an Earnings ESP of +5.26% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Armstrong World Industries, Inc. AWI, with an Earnings ESP of +1.32% and a Zacks Rank #2.
DR Horton Inc. DHI, with an Earnings ESP of +5.20% and a Zacks Rank #2.
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