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Is a Beat in Store for Lennox (LII) this Earnings Season?

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Lennox International, Inc. (LII - Free Report) is slated to release first-quarter 2017 results on Apr 24, before the market opens.

Why a Likely Positive Surprise?

Our proven model shows that Lennox International has the right combination of the two key ingredients.

Zacks ESP: Lennox International has an Earnings ESP of +5.20%, as the Most Accurate estimate of 81 cents comes above the Zacks Consensus Estimate of 77 cents.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Lennox International’s Zacks Rank #3 (Hold), when combined with a positive ESP, predicts some possible earnings beat. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We only caution against stocks with a Zacks Ranks #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

What is Driving the Better-Than-Expected Earnings?

Over the last three months, Lennox International’s shares yielded a return of 11.03%, as against the loss of 0.88% incurred by the Zacks categorized Building Products-Air Conditioner/Heating industry.  

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.

The company anticipates generating higher revenues in the upcoming quarters on the back of improved sales volume and favorable price/mix. In addition, greater cost discipline, superior operations and lower corporate tax rate are expected to bolster earnings per share (EPS) growth in the quarter. Notably, every 1% decline in the tax rate would likely benefit the EPS by roughly 10 cents.

Key Picks

Here are some stocks within the industry that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Louisiana-Pacific Corporation (LPX - Free Report) , with an Earnings ESP of +27.59%, and a Zacks Rank #1.

Boise Cascade Company (BCC - Free Report) , with an Earnings ESP of +44.44%, and a Zacks Rank #1.

Meritage Homes Corporation (MTH - Free Report) , with an Earnings ESP of +2.38%, and a Zacks Rank #2.

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