LII
Lennox International Inc.
$365.63
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 19.4% above fair value
You pay
$365.63
Bear
$224.51
Fair
$306.24
Bull
$383.56
Bear
$224.51
-38.6%
5% stage 1 growth, 11% discount
Fair
$306.24
-16.2%
9% stage 1 growth, 11% discount
Bull
$383.56
+4.9%
11% stage 1 growth, 11% discount
Adjust Assumptions
8.6%
11.0%
3.0%
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
22.6x
Market is pricing in (growth)
10.6%
vs 8.6% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (30 analysts)
$519.10
Divergence from AlphaVal
41%
Summary
Using a two-stage FCF DCF with 9% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $306.24 per share.
Warnings
Wall Street's average price target is $519.10 (from 30 analysts). Our estimate is 41% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions