LII · NYSE · Air-Cond & Warm Air Heatg Equip & Comm & Indl Refrig Equip
$363.28 · $12.9B market value · fiscal year to 31 Dec 2025
Live from the latest filings
7 of 10
Buffett tests pass
Margin of safety 20%
Bear
$244.42
Base
$453.73
Bull
$748.40
Price $363.28
7 pass · 3 mixed · 0 fail · 0 can't tell
Return on equity averaged 382%, reaching 15% in 5 of the years measured; the weakest year was 76%. The ratio is unreliable: equity was zero or negative in several years, so those years have no ROE.
Why this testCapital spending has averaged 1.5× depreciation; estimated maintenance capex was $118.8M last year.
Why this testAt $363.28, the price is 20% below the base-case value of $453.73 (the bear case is $244.42). The standard lens asks for a 25% margin.
Why this testNo loss years across 15 years of filings, with operating margin varying by 2.9% around its average.
Why this testAfter-tax return on invested capital averaged 43% over 10 years and was 33% in the latest year.
Why this testTotal debt of $1.4B would take 1.9 yrs of normalised owner earnings to repay; operating income covers interest 25×. Both tests pass: payback within 4 years and interest cover of 8x or more.
Why this testNormalised owner earnings are $726.9M, and free cash flow has averaged 90% of reported profit.
Why this testEach dollar retained over the period has been matched by 1.8× of market value created ($3.4B retained in total).
Why this testThe diluted share count has changed by -2.4% a year. Shrinking means buybacks are returning value; growing means owners are being diluted.
Why this testThe owner-earnings yield is 5.7% against a 10-year Treasury yield of 5.2%.
Why this testDiscounted owner earnings
Bear
$244.42
Base
$453.73
Bull
$748.40
Price $363.28
| Scenario | Starting owner earnings | Growth (yrs 1–5) | Terminal | Discount | Value / share |
|---|---|---|---|---|---|
| bear | $726.9M | 3.3% | 1.5% | 9.7% | $244.42 |
| base | $726.9M | 7.3% | 2.5% | 8.2% | $453.73 |
| bull | $726.9M | 10.3% | 3.0% | 7.2% | $748.40 |
How sensitive is that?
| Discount ↓ / Growth → | 3.3% | 5.3% | 7.3% | 9.3% | 11.3% |
|---|---|---|---|---|---|
| 6.2% | $568 | $647 | $735 | $832 |
Fiscal year to 31 Dec 2025
Replicly is a research and education tool. It is not financial advice and does not recommend that you buy or sell any investment. Analyses apply Buffett-inspired principles to public data and can be wrong. Warren Buffett and Berkshire Hathaway are not affiliated with and do not endorse Replicly. Capital is at risk.
| $941 |
| 7.1% | $437 | $497 | $564 | $638 | $721 |
|---|
| 8.2% | $353 | $401 | $454 | $513 | $579 |
|---|
| 9.2% | $293 | $333 | $377 | $426 | $480 |
|---|
| 10.2% | $250 | $283 | $320 | $362 | $407 |
|---|
Green: at least 25% above the price. Amber: above it. Red: below it. n/a means the discount rate is at or below growth, where the model has no finite answer. The corners combine the most extreme assumptions, so treat them as bounds.
Discount rate: 10-year Treasury (5.2%) plus a 3% equity hurdle. Price $363.28 on 20 Oct 2026. End-of-day prices from free public sources, may be delayed or missing.
Revenue
$5.2B
Revenue growth (CAGR)
4.0%
Operating margin (avg)
15%
Return on equity (avg)
382%
ROIC (avg)
43%
Normalised owner earnings
$726.9M
Cash conversion
90%
Net debt
$1.4B
Debt payback
1.9 yrs
Share count change (CAGR)
-2.4%
Price / earnings
16×
Owner earnings yield
5.7%