EVENTS:   The Roaring 2020s or a Rerun of the 1970s? - Edward Yardeni/Yardeni Research - 24 Mar 26   Best Equity Short Ideas Conference Call 13 - Thomas Chanos/Badger Consultants & Dr. Aaron Fletcher/Bios Research & Jonathan Telgener/Channel Dynamics & Ed Steele/Iron Blue Financials & John Zolidis/Quo Vadis Capital & Mark Hiley/The Analyst - 26 Mar 26     ROADSHOWS: Chinese Equity Ideas & Channel Checks Across 50 sub-sectors - Don Ma /Horizon Insights   •   London   23 - 27 Mar 26       Long Short European Equity Research - Harry Grist /The Analyst   •   New York   26 Mar 26       Fundamental US Healthcare Short Ideas - Dr Elliot Favus /Favus Institutional Research   •   London   27 - 27 Mar 26      
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Company Research

Lennox International (LII)

Industrials

Northcoast Research

While LII's management has done a stellar job righting the ship over the past few years, Northcoast balances this view with their dour outlook for the North American residential HVAC market in the intermediate term, which is c.70% of the group's business. In their 36-page industry initiation report titled ‘Hot Air and Cold Realities’, they argue that while market participants appreciate the unit volume headwinds, they do not appreciate the pricing headwinds given the potential for intensifying competitive dynamics. As such, Northcoast initiates coverage of LII with a Sell rating and TP of $475 (30% downside). Other stocks covered include Carrier Global, Comfort Systems and Trane Technologies.

Edition: 200

- 29 November, 2024


Carrier Global (CARR)

Industrials

New Constructs

Street Earnings are higher than New Construct’s Core Earnings for 339 stocks in the S&P 500 with 186 companies overstating EPS by >10%. One of the worst offenders is CARR, where the difference between Street Earnings and Core Earnings is $1.76/share, or 76% of Street Earnings. The company’s GAAP Earnings Distortion is even higher at $3.54/share. CARR’s Stock Rating is Very Unattractive, largely due to its low ROIC of 4% and the expensive valuation of its stock. Despite trading at $45/share CARR has an EBV, or no-growth value, of -$16/share. Low ROIC and an expensive valuation also land CARR in New Construct’s Most Dangerous Stocks Model Portfolio.

Edition: 157

- 31 March, 2023