LII is now overvalued and could go down -26%

Based on our analysis, Lennox International has received an overvalued rating of 2 out of 5 stars from Cashu. This assessment is primarily due to several key financial ratios that indicate potential overvaluation compared to its sector peers. The Price-to-Earnings (P/E) ratio for Lennox is 25.90, significantly higher than the sector average of 21.49. A higher P/E ratio suggests that investors are pricing the stock at a premium, anticipating higher future growth. However, this can also indicate overvaluation if those growth expectations are not met. Additionally, the Price-to-Book (P/B) ratio stands at 25.53, compared to the sector average of 2.45. The P/B ratio indicates how much investors are willing to pay for each dollar of net assets. A P/B ratio this high may suggest that the stock is overvalued relative to its actual asset value. The Dividend Yield for Lennox is another concern, currently at 0.77%, lower than the sector average of 1.12%. This metric reflects the return on investment for shareholders in terms of dividends. A lower yield may deter income-focused investors, suggesting that the company is not returning enough value to shareholders compared to its peers. In summary, while Lennox International demonstrates strong profitability metrics such as a high net profit margin and return on equity, its elevated valuation ratios present a compelling case for the overvalued rating. This is not a comprehensive overview of our valuation, and should not be viewed as financial advice. Always do your own research before considering an investment.