Trane Technologies (TT) AI Stock Analysis

• Market Cap: $94.04B
• Dividend Yield: 0.89%
• Average Volume (3M): 1.32M
• Price to Earnings (P/E): 35.1
• Beta (1Y): 1.30
• Revenue Growth: 11.43%
• EPS Growth: 28.49%
• Country: US
• Employees: 45,000
• Sector: Industrials
• Sector Strength: 88
• Industry: Construction
• EPS (TTM): 2.45
• Shares Outstanding: 223,018,000
• 10 Day Avg. Volume: 1,089,844
• 30 Day Avg. Volume: 1,322,232
• PEG Ratio: 0.83
• Price to Book (P/B): 6.40
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 32.25
• Enterprise Value/Market Cap: 0.45
• Enterprise Value/Revenue: 0.55
• Enterprise Value/Gross Profit: 5.85
• Enterprise Value/Ebitda: 2.81
• 1Y Price Target: $424.73
• Price Target Upside: 0.42% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 81 Outperform
• Price Target: $498.00 ▲(17.74%Upside)

Trane Technologies' strong financial performance and positive earnings call significantly contribute to its high score. Technical indicators show bullish momentum, though valuation suggests the stock is expensive. Corporate events indicate strong governance support, but the analyst 'Sell' rating introduces some caution.

Positive Factors

Analyst Upgrade

Analyst upgrades the rating from equal-weight to overweight based on the belief that Trane Technologies is headed toward top-tier compounder status, valued with a quality-growth premium.

Earnings Performance

Trane’s 4Q24 revenue and EPS came in above both our estimates and consensus, driven primarily by better than forecast Americas and APAC segment.

Long-term Growth Potential

Trane has been upgraded to a Buy, with a DCF-derived target price of USD415, indicating confidence in its long-term growth potential.

Negative Factors

Backlog and Currency Headwinds

Backlog is down ~2% at $6.75bn, however the company adjusted $0.5bn of backlog on currency headwinds, transport normalization, and new down payment policy.

Order Challenges

Tougher order setup for H1, lingering DeepSeek rumblings could create some investor angst.

Tariff and Economic Uncertainty

Uncertainties in the tariff landscape and concerns about consumer and economic growth create an uncertain outlook for US industrial stocks.

Trane Technologies Business Overview & Revenue Model

Company Description

Trane Technologies plc, together with its subsidiaries, engages in the designing, manufacturing, selling, and servicing of solutions for heating, ventilation, air conditioning, and transport refrigeration. It offers air conditioners, exchangers, and handlers; airside and terminal devices; auxiliary power units; chillers; coils and condensers; gensets; furnaces; heat pumps; home automation products; humidifiers; hybrid and non-diesel transport refrigeration, and ice energy storage solutions; indoor air quality assessments and related products; large and light commercial unitary products; motor replacements; refrigerant reclamation products; thermostats/controls; transport heater products; variable refrigerant flow products; and water source heat pumps. The company also provides building management, control, ductless, geothermal, package heating and cooling, temporary heating and cooling, and unitary systems; bus, rail, and multi-pipe heating, ventilation, and air conditioning systems; and container, cryogenic, diesel-powered, electric-powered trailer and truck, hybrid-powered trailer, industrial, rail, self-powered truck, trailer, and vehicle-powered truck refrigeration systems, as well as aftermarket and OEM parts and supplies. In addition, it offers energy and facility management, installation and performance contracting, repair and maintenance, and rental services. It markets and sells its products under the Trane and Thermo King brands through sales offices, distributors, and dealers in the United States; and through sales and service companies with a supporting chain of distributors worldwide. The company was formerly known as Ingersoll-Rand Plc and changed its name to Trane Technologies plc in March 2020. Trane Technologies plc was founded in 1885 and is headquartered in Swords, Ireland.

How the Company Makes Money

Trane Technologies makes money through the sale of HVAC systems, services, and solutions, catering to both residential and commercial markets. The company generates revenue from the manufacturing and sale of its products, as well as from service agreements, maintenance contracts, and parts sales. Key revenue streams include the commercial HVAC segment, which serves businesses and institutions, and the residential segment, which caters to homeowners. Additionally, the company benefits from its transport refrigeration business, providing solutions for temperature-controlled transportation. Strategic partnerships and a focus on energy efficiency and sustainability are critical factors contributing to Trane Technologies' earnings, as they align with global trends towards reducing carbon footprints and improving energy efficiency.

Trane Technologies Financial Statement Overview

Summary

Trane Technologies demonstrates robust financial health with significant revenue growth, healthy profit margins, and strong cash flow generation. The company maintains a strong balance sheet, although the moderate level of debt presents some risk.

Income Statement

Trane Technologies shows strong performance with a consistent increase in revenue, evidenced by significant revenue growth from 2020 to the TTM period. Gross profit and net profit margins are healthy, with a gross profit margin of 35.97% and a net profit margin of 13.27% in the TTM. The company has maintained stable EBIT and EBITDA margins, demonstrating operational efficiency and profitability.

Balance Sheet

The company's balance sheet reflects a solid financial position with a reasonable debt-to-equity ratio of 0.49 and an equity ratio of 48.85% in the TTM. Return on equity is robust at 21.09%, indicating effective management of shareholder equity. However, some potential risks include the relatively high total debt, which could impact financial flexibility.

Cash Flow

Trane Technologies exhibits strong cash flow performance with a substantial free cash flow growth rate in the TTM. The operating cash flow to net income ratio is favorable at 1.56, suggesting efficient cash generation relative to net income. The free cash flow to net income ratio of 1.42 further supports the company's ability to generate cash beyond its earnings, highlighting operational strength.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
20.31B	19.84B	17.68B	15.99B	14.14B	12.45B
	Gross Profit
7.30B	7.08B	5.86B	4.96B	4.47B	3.80B
	EBIT
3.69B	3.50B	2.89B	2.42B	2.02B	1.53B
	EBITDA
4.06B	3.86B	3.15B	2.72B	2.32B	1.83B
	Net Income Common Stockholders
2.74B	2.57B	2.02B	1.76B	1.42B	854.90M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
860.50M	1.59B	1.10B	1.22B	2.16B	3.29B
	Total Assets
20.12B	20.15B	19.39B	18.08B	18.06B	18.16B
	Total Debt
4.77B	4.77B	4.78B	4.84B	4.84B	5.27B
	Net Debt
3.91B	3.18B	3.68B	3.62B	2.68B	1.98B
	Total Liabilities
12.60B	12.66B	12.37B	11.98B	11.79B	11.73B
	Stockholders Equity
7.49B	7.46B	7.00B	6.11B	6.27B	6.43B
Cash Flow		Free Cash Flow
2.83B	2.77B	2.09B	1.21B	1.37B	1.29B
	Operating Cash Flow
3.23B	3.15B	2.39B	1.50B	1.59B	1.44B
	Investing Cash Flow
-863.80M	-562.90M	-1.17B	-540.40M	-545.70M	-376.20M
	Financing Cash Flow
-2.35B	-2.02B	-1.35B	-1.85B	-2.13B	884.30M

Trane Technologies Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 422.96
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TT, the sentiment is Neutral. The current price of 422.96 is below the 20-day moving average (MA) of 427.44, above the 50-day MA of 386.10, and above the 200-day MA of 377.69, indicating a neutral trend. The MACD of 9.72 indicates Positive momentum. The RSI at 58.42 is Neutral, neither overbought nor oversold. The STOCH value of 33.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TT.

Trane Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TT	81 Outperform	$94.04B	35.08	38.45%	0.89%	11.43%	28.49%
CARR	81 Outperform	$61.51B	16.47	25.69%	1.25%	0.14%	202.13%
CSL	78 Outperform	$16.36B	10.33	33.11%	1.06%	-0.14%	135.52%
JCI	74 Outperform	$67.71B	27.44	14.92%	1.44%	-8.39%	51.56%
LII	74 Outperform	$19.70B	24.75	131.48%	0.83%	7.78%	30.10%
AAON	67 Neutral	$6.39B	41.27	19.85%	0.51%	8.24%	-11.66%
Sector *	66 Neutral	$4.51B	12.29	5.40%	3.67%	4.15%	-12.21%

Trane Technologies Corporate Events

Trane Technologies Shareholders Approve Key Governance Decisions

At the 2025 Annual General Meeting, Trane Technologies‘ shareholders elected twelve directors, approved executive compensation, and appointed PriceWaterhouseCoopers as independent auditors for the fiscal year ending December 31, 2025. Additionally, shareholders renewed the directors’ authority to issue shares and reallot treasury shares, indicating strong support for the company’s governance and strategic financial decisions.

The most recent analyst rating on (TT) stock is a Sell with a $295.00 price target. To see the full list of analyst forecasts on Trane Technologies stock, see the TT Stock Forecast page.

Trane Technologies Announces Retirement of Senior VP

On May 28, 2025, Evan M. Turtz, Senior Vice President, General Counsel, and Secretary of Trane Technologies, announced his decision to retire later in the year. His retirement will follow a transition period with his successor to ensure a smooth leadership transition.

The most recent analyst rating on (TT) stock is a Hold with a $407.00 price target. To see the full list of analyst forecasts on Trane Technologies stock, see the TT Stock Forecast page.

Trane Technologies Secures New $1 Billion Credit Agreement

On May 27, 2025, Trane Technologies entered into a new $1 billion senior unsecured revolving credit agreement, replacing the previous agreement set to expire in 2026. This new agreement, effective until 2030, will be used for working capital, supporting commercial paper programs, and other corporate purposes, with obligations guaranteed by the company and its subsidiaries.

The most recent analyst rating on (TT) stock is a Hold with a $407.00 price target. To see the full list of analyst forecasts on Trane Technologies stock, see the TT Stock Forecast page.