Trane Technologies (TT) AI Stock Analysis

• Market Cap: $90.95B
• Dividend Yield: 0.89%
• Average Volume (3M): 1.24M
• Price to Earnings (P/E): 31.6
• Beta (1Y): 1.17
• 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: 973,193
• 30 Day Avg. Volume: 1,235,729
• 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: 1.08
• Enterprise Value/Revenue: 4.66
• Enterprise Value/Gross Profit: 12.81
• Enterprise Value/Ebitda: 22.83
• 1Y Price Target: $485.00
• Price Target Upside: 18.25% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): 13.02
• Revenue Forecast (FY): $21.27B

• Rating: 67 Neutral
• Price Target: $434.00 ▲(5.81% Upside)

Trane Technologies' strong financial performance and positive earnings call guidance are offset by bearish technical indicators and a high valuation. The company's robust backlog and strategic focus on high-growth segments provide a positive outlook, but market challenges in certain areas remain a concern.

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 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 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: Negative
• Last Price: 410.16
• 50DMA: Negative
• 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 Negative. The current price of 410.16 is below the 20-day moving average (MA) of 418.91, below the 50-day MA of 420.77, and above the 200-day MA of 403.17, indicating a neutral trend. The MACD of -3.11 indicates Positive momentum. The RSI at 44.24 is Neutral, neither overbought nor oversold. The STOCH value of 64.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TT.

Trane Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JCI	70 Outperform	$70.24B	22.84	11.86%	1.31%	-10.19%	100.65%
CSL	69 Neutral	$13.31B	18.02	32.36%	1.32%	0.14%	3.88%
TT	67 Neutral	$90.95B	31.57	37.07%	0.89%	8.58%	20.37%
LII	64 Neutral	$17.09B	20.57	92.25%	1.00%	3.77%	12.46%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
AAON	63 Neutral	$7.63B	77.70	12.08%	0.44%	8.77%	-47.50%
CARR	63 Neutral	$45.69B	21.77	9.44%	1.67%	-7.93%	-35.00%

Trane Technologies Corporate Events

Trane Technologies’ Earnings Call Highlights Growth Amid Challenges

Trane Technologies Plc’s recent earnings call painted a picture of a company experiencing both triumphs and challenges. The sentiment was largely positive, driven by strong performances in the Commercial HVAC and Services segments, which achieved record bookings and robust free cash flow. However, the company also faced hurdles in the Residential and Transport markets, alongside declining margins in the EMEA region. Despite these challenges, Trane Technologies’ strategic focus on innovation and backlog growth suggests a promising future, even as certain market segments pose ongoing concerns.

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.