Trane Technologies (TT) AI Stock Analysis

• Market Cap: $93.09B
• Dividend Yield: 0.86%
• Average Volume (3M): 1.29M
• Price to Earnings (P/E): 33.2
• Beta (1Y): 1.32
• Revenue Growth: 10.20%
• EPS Growth: 24.57%
• Country: US
• Employees: 45,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Construction
• EPS (TTM): 3.88
• Shares Outstanding: 222,515,370
• 10 Day Avg. Volume: 1,065,505
• 30 Day Avg. Volume: 1,285,841
• PEG Ratio: 1.14
• Price to Book (P/B): 11.12
• Price to Sales (P/S): 4.18
• P/FCF Ratio: 29.88
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 4.93
• Enterprise Value/Gross Profit: 13.60
• Enterprise Value/Ebitda: 24.41
• 1Y Price Target: $481.92
• Price Target Upside: 17.97% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

• Rating: 72 Outperform
• Price Target: $453.00 ▲(10.89% Upside)

Trane Technologies' strong financial performance and positive earnings call sentiment are key strengths, driving the overall score. However, technical indicators suggest a bearish trend, and the high P/E ratio indicates potential overvaluation. The decline in free cash flow growth and regional challenges in EMEA and APAC are concerns that could impact future performance.

Positive Factors

Revenue Growth

Strong revenue growth and record bookings indicate robust demand and effective market positioning, supporting long-term business expansion.

Strong Services Business

Consistent growth in the services segment highlights the company's ability to generate recurring revenue, enhancing financial stability and customer retention.

Leadership Change

The appointment of a new senior vice president strengthens the leadership team, potentially improving strategic direction and compliance oversight.

Negative Factors

Free Cash Flow Decline

A significant decline in free cash flow growth could limit the company's ability to invest in new opportunities and manage financial obligations effectively.

Residential HVAC Challenges

Supply chain issues affecting residential HVAC could hinder revenue growth in this segment, impacting overall performance if not resolved.

EMEA Margin Decline

Margin declines in EMEA due to strategic investments and integration challenges may pressure profitability if not addressed effectively.

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 performance with consistent revenue growth and solid profitability margins. The balance sheet is stable with a favorable debt-to-equity ratio and high return on equity. However, the decline in free cash flow growth is a concern that needs addressing.

Income Statement

Trane Technologies has demonstrated strong revenue growth with a consistent upward trajectory over the past few years, highlighted by a TTM revenue growth rate of 2.16%. The company maintains healthy profitability margins, with a gross profit margin of 36.26% and a net profit margin of 13.76% in the TTM period. EBIT and EBITDA margins are also robust, indicating efficient operational management. These factors contribute to a strong income statement performance.

Balance Sheet

The balance sheet reflects a stable financial position with a manageable debt-to-equity ratio of 0.59 in the TTM period, showing improvement from previous years. Return on equity is impressive at 37.61%, indicating effective use of equity to generate profits. The equity ratio stands at a healthy level, suggesting a solid capital structure. However, the company should continue monitoring its debt levels to maintain financial flexibility.

Cash Flow

Trane Technologies' cash flow statement shows a mixed performance. While the operating cash flow to net income ratio is moderate at 0.48, indicating decent cash generation relative to net income, the free cash flow growth rate has declined by 62.4% in the TTM period. The free cash flow to net income ratio remains strong at 0.87, suggesting efficient cash conversion. The company should focus on improving free cash flow growth to enhance overall cash flow health.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	20.75B	19.84B	17.68B	15.99B	14.14B	12.45B
Gross Profit	7.52B	7.08B	5.86B	4.96B	4.47B	3.80B
EBITDA	4.19B	3.86B	3.15B	2.72B	2.32B	1.83B
Net Income	2.86B	2.57B	2.02B	1.76B	1.42B	854.90M
Balance Sheet
Total Assets	20.99B	20.15B	19.39B	18.08B	18.06B	18.16B
Cash, Cash Equivalents and Short-Term Investments	774.20M	1.59B	1.10B	1.22B	2.16B	3.29B
Total Debt	4.62B	4.77B	4.78B	4.84B	4.84B	5.27B
Total Liabilities	13.14B	12.66B	12.37B	11.98B	11.79B	11.73B
Stockholders Equity	7.83B	7.46B	7.00B	6.11B	6.27B	6.43B
Cash Flow
Free Cash Flow	2.81B	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	-422.30M	-562.90M	-1.17B	-540.40M	-545.70M	-376.20M
Financing Cash Flow	-3.00B	-2.02B	-1.35B	-1.85B	-2.13B	884.30M

Trane Technologies Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 408.50
• 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 408.5 is below the 20-day moving average (MA) of 419.30, below the 50-day MA of 416.58, and above the 200-day MA of 395.94, indicating a neutral trend. The MACD of 0.26 indicates Positive momentum. The RSI at 42.30 is Neutral, neither overbought nor oversold. The STOCH value of 34.50 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
TT	72 Outperform	$93.09B	33.20	38.89%	0.86%	10.20%	24.57%
LII	72 Outperform	$18.78B	22.86	92.25%	0.89%	3.77%	12.46%
JCI	70 Outperform	$72.38B	32.85	12.52%	1.36%	-13.10%	40.62%
AAON	70 Outperform	$8.23B	68.83	15.52%	0.39%	5.39%	-34.28%
CARR	67 Neutral	$49.08B	23.01	10.79%	1.52%	-5.24%	-33.37%
CSL	66 Neutral	$14.33B	18.63	31.34%	1.22%	1.37%	5.96%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Trane Technologies Corporate Events

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.