Is Lennox International, Inc. overvalued or undervalued?

As of 26 September 2025, the valuation grade for Lennox International, Inc. has moved from very attractive to attractive, indicating a shift in market perception. The company appears to be overvalued based on its current metrics, particularly with a P/E ratio of 59, a Price to Book Value of 55.76, and an EV to EBITDA of 43.08, which are significantly higher than its peers. For comparison, Xylem, Inc. has a P/E of 37.49 and an EV to EBITDA of 21.47, while Dover Corp. shows a P/E of 43.35 and an EV to EBITDA of 29.69, highlighting Lennox's premium valuation.
In terms of recent performance, Lennox has underperformed against the S&P 500 across multiple periods, with a year-to-date return of -14.34% compared to the S&P's 12.96%. This trend reinforces the notion that the stock may be overvalued, as its high valuation ratios do not seem to be justified by its recent stock performance.