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Trane Technologies (TT)
NYSE:TT
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Trane Technologies
(NYSE:TT)
Select Model
Select Model
Rating:70Outperform
Price Target:
$437.00
â–²(10.99% Upside)
Trane Technologies' overall stock score is driven by strong financial performance and positive earnings call highlights, particularly in the Commercial HVAC segment. However, bearish technical indicators and a high P/E ratio weigh down the score. The recent acquisition adds a positive outlook for future growth.
Positive Factors
Strong Revenue Growth
Consistent revenue growth indicates a solid market position and effective business strategies, supporting long-term financial stability.
Strategic Acquisition
The acquisition enhances Trane's capabilities in digital energy solutions, positioning it for growth in the expanding data center cooling market.
Strong Commercial HVAC Performance
Record bookings in the Commercial HVAC segment highlight robust demand and effective market strategies, ensuring future revenue streams.
Negative Factors
Residential Market Challenges
Declines in the Residential segment suggest market saturation or competitive pressures, potentially impacting future revenue growth.
Transport Refrigeration Market Challenges
Challenges in the Transport market could hinder revenue growth and profitability, affecting the company's overall financial performance.
Cash Flow Growth Challenges
Negative cash flow growth can limit the company's ability to reinvest in its business and pursue strategic opportunities, impacting long-term growth.
Trane Technologies (TT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$86.45B
Dividend Yield0.96%
Average Volume (3M)1.28M
Price to Earnings (P/E)30.3
Beta (1Y)1.18
Revenue Growth8.58%
EPS Growth20.37%
CountryUS
Employees45,000
SectorIndustrials
Sector Strength72
IndustryConstruction
Share Statistics
EPS (TTM)3.88
Shares Outstanding221,739,000
10 Day Avg. Volume1,600,799
30 Day Avg. Volume1,282,123
Financial Highlights & Ratios
PEG Ratio1.10
Price to Book (P/B)11.12
Price to Sales (P/S)4.18
P/FCF Ratio29.88
Enterprise Value/Market Cap1.14
Enterprise Value/Revenue4.66
Enterprise Value/Gross Profit12.81
Enterprise Value/Ebitda22.83
Forecast
1Y Price Target
$483.73Price Target Upside22.86% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Trane Technologies Business Overview & Revenue Model
Company DescriptionTrane 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 MoneyTrane Technologies generates revenue through the sale of its HVAC and refrigeration systems, parts, and services, which are offered to a wide range of customers including residential homeowners, commercial businesses, and industrial clients. Key revenue streams include direct sales of equipment, maintenance and repair services, and energy efficiency solutions. The company also benefits from long-term service contracts that provide recurring revenue. Strategic partnerships with builders, contractors, and distributors enhance its market reach and sales capabilities. Additionally, Trane Technologies invests in innovation and sustainability initiatives, which not only align with market trends but also attract environmentally-conscious customers, further bolstering its earnings.
Trane Technologies Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyTrane Technologies Earnings Call Summary
Earnings Call Date:Oct 31, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Jan 29, 2026
Earnings Call Sentiment Neutral
The earnings call depicted a strong performance in the Commercial HVAC and Services segments, with record bookings and robust free cash flow. However, challenges in the Residential and Transport markets, along with declining margins in EMEA, were notable lowlights. The company's strategic focus on innovation and backlog growth positions it well for the future, but market challenges in certain segments remain a concern.Q3-2025 Updates
Positive Updates
Record Quarterly Bookings
Trane Technologies achieved record quarterly bookings of $6 billion, representing organic growth of 13% year-over-year.
Strong Performance in Commercial HVAC
Americas Commercial HVAC bookings reached an all-time high, surging 30% year-over-year, with applied bookings more than doubling.
Robust Free Cash Flow
The company reported robust free cash flow, contributing to a strong financial performance.
Adjusted Operating Margin Expansion
Trane Technologies delivered 170 basis points of adjusted operating margin expansion and 15% adjusted EPS growth.
Significant Growth in Asia Pacific
In Asia Pacific, Commercial HVAC bookings were up mid-30s, with revenues growing in the low teens.
Services Business as a Growth Driver
The Services business, constituting approximately 1/3 of total revenues, grew in low double digits year-to-date and boasts a low-teens CAGR since 2020.
Positive Price Realization in Americas
The Americas segment reported positive price realization, contributing to the 4% organic revenue growth.
Negative Updates
Residential Bookings and Revenues Decline
Residential bookings and revenues declined approximately 30% and 20%, respectively, due to channel inventory normalization.
Impact of Residential Market Slowdown
The Residential market slowdown is expected to impact Q4 revenues by approximately $150 million.
Transport Refrigeration Market Challenges
The Americas Transport market forecast has softened incrementally, with Q4 expected revenues down approximately 10%.
EMEA Adjusted EBITDA Margins Decline
EMEA adjusted EBITDA margins declined by 60 basis points due to year-1 M&A-related integration costs.
Company Guidance
During the Trane Technologies Q3 2025 earnings call, the company provided robust guidance for the remainder of the fiscal year and into 2026. The guidance highlighted record quarterly bookings of $6 billion, marking a 13% organic growth year-over-year, and a 170 basis points expansion in adjusted operating margin. Adjusted EPS grew by 15%, and free cash flow remained strong. The Commercial HVAC business in the Americas experienced a 30% increase in bookings, with applied bookings more than doubling, contributing to an ending backlog of $7.2 billion. However, the Residential segment saw bookings and revenues decline by approximately 30% and 20%, respectively. Looking ahead, Trane Technologies revised its full-year guidance to reflect 6% organic revenue growth, despite headwinds in Residential and Transport Americas markets. The company expects adjusted EPS for 2025 to range between $12.95 and $13.05, indicating a 15% to 16% increase year-over-year. For Q4, organic revenue growth is projected at 3%, with adjusted EPS expected to be $2.75 to $2.85. The company emphasized its strategic focus on reinvestment, maintaining a strong balance sheet, and deploying excess cash through dividends, M&A, and share repurchases to maximize shareholder returns. Trane Technologies remains well-positioned for growth in 2026, driven by a strong backlog, innovative offerings, and a rapidly expanding pipeline in high-growth verticals such as data centers.Trane Technologies Financial Statement Overview
Summary
Trane Technologies demonstrates strong financial health with robust revenue growth and profitability. The balance sheet is stable with moderate leverage and high return on equity. While cash flow growth has faced recent challenges, the company maintains strong cash conversion metrics. Overall, the financial outlook remains positive, with potential for continued growth and profitability.Income Statement
Trane Technologies has demonstrated strong revenue growth over the years, with a TTM revenue growth rate of 1.45%. The company maintains healthy margins, including a gross profit margin of 36.42% and a net profit margin of 13.93% for TTM. EBIT and EBITDA margins are also robust at 18.62% and 20.44%, respectively, indicating efficient operations and profitability.85
Very Positive
Balance Sheet
The company has a moderate debt-to-equity ratio of 0.55, reflecting a balanced approach to leverage. Return on equity is impressive at 37.67%, showcasing effective use of equity to generate profits. The equity ratio stands at 39.05%, indicating a solid equity base relative to total assets.78
Positive
Cash Flow
Trane Technologies faces challenges in cash flow growth, with a negative free cash flow growth rate of -9.26% for TTM. However, the company maintains a strong free cash flow to net income ratio of 86.36%, indicating good cash conversion. The operating cash flow to net income ratio is 45.28%, suggesting adequate cash flow generation relative to net income.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 21.05B | 19.84B | 17.68B | 15.99B | 14.14B | 12.45B |
| Gross Profit | 7.67B | 7.08B | 5.86B | 4.96B | 4.47B | 3.80B |
| EBITDA | 4.30B | 3.86B | 3.15B | 2.72B | 2.32B | 1.83B |
| Net Income | 2.93B | 2.57B | 2.02B | 1.76B | 1.42B | 854.90M |
Balance Sheet | ||||||
| Total Assets | 21.37B | 20.15B | 19.39B | 18.08B | 18.06B | 18.16B |
| Cash, Cash Equivalents and Short-Term Investments | 1.13B | 1.59B | 1.10B | 1.22B | 2.16B | 3.29B |
| Total Debt | 4.62B | 5.38B | 4.78B | 4.84B | 4.84B | 5.27B |
| Total Liabilities | 13.03B | 12.66B | 12.37B | 11.98B | 11.79B | 11.73B |
| Stockholders Equity | 8.35B | 7.46B | 7.00B | 6.11B | 6.27B | 6.43B |
Cash Flow | ||||||
| Free Cash Flow | 2.55B | 2.77B | 2.09B | 1.21B | 1.37B | 1.29B |
| Operating Cash Flow | 2.95B | 3.15B | 2.39B | 1.50B | 1.59B | 1.44B |
| Investing Cash Flow | -230.90M | -562.90M | -1.17B | -540.40M | -545.70M | -376.20M |
| Financing Cash Flow | -3.09B | -2.02B | -1.35B | -1.85B | -2.13B | 884.30M |
Trane Technologies Technical Analysis
Negative
393.74
Price Trends
413.48
Negative
415.33
Negative
405.84
Negative
Market Momentum
-7.08
Positive
42.96
Neutral
40.71
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TT, the sentiment is Negative. The current price of 393.74 is below the 20-day moving average (MA) of 400.61, below the 50-day MA of 413.48, and below the 200-day MA of 405.84, indicating a bearish trend. The MACD of -7.08 indicates Positive momentum. The RSI at 42.96 is Neutral, neither overbought nor oversold. The STOCH value of 40.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TT.
Trane Technologies Risk Analysis
Trane Technologies disclosed 31 risk factors in its most recent earnings report. Trane Technologies reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Trane Technologies Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $86.45B | 30.30 | 37.07% | 0.96% | 8.58% | 20.37% | |
70 Outperform | $13.84B | 18.58 | 32.36% | 1.28% | 0.14% | 3.88% | |
70 Outperform | $73.31B | 44.24 | 11.86% | 1.27% | -10.19% | 100.65% | |
66 Neutral | $44.81B | 21.41 | 9.44% | 1.65% | -7.93% | -35.00% | |
64 Neutral | $17.38B | 20.87 | 92.25% | 0.96% | 3.77% | 12.46% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | $6.13B | 62.47 | 12.08% | 0.53% | 8.77% | -47.50% |
* Industrials Sector Average
TT
Trane Technologies
393.74
17.42
4.63%
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Trane Technologies Corporate Events
M&A TransactionsBusiness Operations and Strategy
Trane Technologies Acquires Stellar Energy Digital Business
Positive
Dec 2, 2025
On December 2, 2025, Trane Technologies plc announced a definitive agreement to acquire the Stellar Energy Digital business from Stellar Energy International, Ltd. This acquisition is expected to enhance Trane Technologies’ capabilities in digital energy solutions, potentially strengthening its position in the industry and offering new opportunities for growth.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.