Trane Technologies (TT) AI Stock Analysis

• Market Cap: $96.12B
• Dividend Yield: 0.87%
• Average Volume (3M): 1.24M
• Price to Earnings (P/E): 33.4
• Beta (1Y): 1.18
• Revenue Growth: 8.58%
• EPS Growth: 20.37%
• Country: US
• Employees: 45,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Construction
• EPS (TTM): 3.88
• Shares Outstanding: 221,739,000
• 10 Day Avg. Volume: 1,429,099
• 30 Day Avg. Volume: 1,239,359
• PEG Ratio: 1.10
• Price to Book (P/B): 11.12
• Price to Sales (P/S): 4.18
• P/FCF Ratio: 29.88
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 4.66
• Enterprise Value/Gross Profit: 12.81
• Enterprise Value/Ebitda: 22.83
• 1Y Price Target: $484.00
• Price Target Upside: 14.76% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 78 Outperform
• Price Target: $509.00 ▲(20.69% Upside)

Trane Technologies' overall stock score is driven by strong financial performance and positive earnings call insights, highlighting robust growth in key segments and strategic initiatives. Technical analysis supports a bullish trend, although valuation metrics suggest the stock may be overvalued. Challenges in certain markets are noted but are offset by the company's strong backlog and strategic focus.

Positive Factors

Strong Revenue Growth

Trane Technologies' strong revenue growth, particularly in the Americas Commercial HVAC segment, indicates robust market demand and effective sales strategies, which are crucial for long-term business expansion and profitability.

Robust Services Business

The consistent growth in the services segment, a key revenue driver, underscores the company's ability to generate recurring income and enhance customer loyalty, supporting sustainable long-term financial performance.

Strong Financial Health

Trane Technologies' stable balance sheet and high return on equity reflect efficient capital management and financial resilience, enabling the company to invest in growth opportunities and weather economic fluctuations.

Negative Factors

Residential HVAC Challenges

The decline in residential HVAC revenues due to refrigerant shortages highlights potential supply chain vulnerabilities, which could impact the company's ability to meet demand and maintain market share in this segment.

EMEA Margin Decline

The margin decline in EMEA, despite revenue growth, indicates cost pressures and strategic challenges in the region, which could affect profitability and require strategic adjustments to improve efficiency.

Asia Pacific Revenue Decline

The revenue and margin decline in Asia Pacific suggests challenges in market penetration and competitive positioning, which may necessitate strategic initiatives to regain growth and improve operational efficiency in the region.

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 generates revenue through the sale of its HVAC systems, services, and solutions. The company has a robust revenue model that includes multiple key streams: product sales from heating and cooling systems, installation and maintenance services, and energy management solutions. A significant portion of its earnings comes from recurring service contracts that provide ongoing maintenance and support for installed systems. Additionally, Trane Technologies benefits from partnerships with contractors, distributors, and builders, which help expand its market reach. The company's commitment to sustainability also attracts clients looking to reduce energy costs and comply with environmental regulations, further contributing to its revenue growth.

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.

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.

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.

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

• Technical Analysis Sentiment: Neutral
• Last Price: 421.75
• 50DMA: Positive
• 100DMA: Negative
• 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 421.75 is below the 20-day moving average (MA) of 428.21, above the 50-day MA of 419.56, and above the 200-day MA of 399.65, indicating a neutral trend. The MACD of 2.61 indicates Positive momentum. The RSI at 45.48 is Neutral, neither overbought nor oversold. The STOCH value of 20.67 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	78 Outperform	$96.12B	33.36	37.07%	0.87%	8.58%	20.37%
JCI	70 Outperform	$80.27B	24.39	11.86%	1.24%	-10.19%	100.65%
AAON	69 Neutral	$8.63B	87.82	12.08%	0.37%	8.77%	-47.50%
CSL	69 Neutral	$13.40B	18.15	32.36%	1.26%	0.14%	3.88%
CARR	68 Neutral	$48.28B	23.01	9.44%	1.58%	-7.93%	-35.00%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
LII	61 Neutral	$17.17B	20.66	92.25%	1.01%	3.77%	12.46%

Trane Technologies Corporate Events

Trane Technologies Reports Robust Q3 2025 Earnings

Trane Technologies plc is a global climate innovator specializing in efficient and sustainable climate solutions for buildings, homes, and transportation through its strategic brands Trane and Thermo King. In its latest earnings report, Trane Technologies announced robust financial results for the third quarter of 2025, highlighted by record enterprise bookings of $6 billion, a 15% increase from the previous year, and a 15% rise in adjusted earnings per share. The company also reported a significant growth in its commercial HVAC segment, particularly in the Americas, where organic bookings surged by 30% driven by a more than 100% increase in applied solutions.

Trane Technologies Reports Strong Q2 Results and Raises Guidance

Trane Technologies plc is a global climate innovator specializing in efficient and sustainable climate solutions for buildings, homes, and transportation through its strategic brands, Trane and Thermo King. In its latest earnings report, Trane Technologies announced a strong second quarter for 2025, with record enterprise bookings and a significant increase in earnings per share. The company reported a 5% increase in bookings, with net revenues rising by 8% compared to the previous year. The Americas segment led the growth, particularly in the Commercial HVAC sector, which saw a substantial rise in demand.

Trane Technologies Reports Strong Q2 Earnings

Trane Technologies’ recent earnings call conveyed a generally positive sentiment, driven by strong performance in the commercial HVAC sector and robust growth in services. The company reported increased revenue and EPS guidance, although challenges were noted in the residential HVAC segment due to supply shortages and margin pressures in EMEA and Asia Pacific, particularly influenced by market conditions in China.