We expect Lennox International, Inc. (LII - Snapshot Report) 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 - Snapshot Report) , 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 - Analyst Report) , with an Earnings ESP of +1.32% and a Zacks Rank #2.
DR Horton Inc. (DHI - Analyst Report) , with an Earnings ESP of +5.20% and a Zacks Rank #2.
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