Trane Technologies (TT)
NYSE:TT
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Trane Technologies
(NYSE:TT)
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Rating:78Outperform
Price Target:
$531.00
â–²(22.96% Upside)
Action:ReiteratedDate:01/30/26
The score is driven primarily by strong fundamentals (growth, expanding margins, and robust free cash flow) and constructive earnings guidance backed by record backlog/bookings. This is partially offset by a premium valuation and technical indicators that suggest the stock is somewhat stretched in the near term.
Positive Factors
Recurring Services Revenue
A large, growing services base (~1/3 of revenue) creates durable, higher‑margin recurring revenue and long service tails. This installed‑base monetization cushions cyclicality in equipment sales, supports margin sustainability, and provides predictable cash flow over multiple years.
Negative Factors
Residential Demand Cyclicality
Significant residential troughing and channel inventory normalization expose the company to housing and consumer cycles. Production cuts and deleverage compress near‑term margins and revenue recognition, and slower residential recovery could drag consolidated growth and operating leverage for several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring Services Revenue
A large, growing services base (~1/3 of revenue) creates durable, higher‑margin recurring revenue and long service tails. This installed‑base monetization cushions cyclicality in equipment sales, supports margin sustainability, and provides predictable cash flow over multiple years.
Read all positive factors
Trane Technologies (TT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$95.58B
Dividend Yield0.95%
Average Volume (3M)1.34M
Price to Earnings (P/E)29.8
Beta (1Y)1.13
Revenue Growth8.58%
EPS Growth20.37%
CountryUS
Employees45,000
SectorIndustrials
Sector Strength72
IndustryConstruction
Share Statistics
EPS (TTM)2.86
Shares Outstanding221,331,910
10 Day Avg. Volume1,455,595
30 Day Avg. Volume1,343,631
Financial Highlights & Ratios
PEG Ratio2.07
Price to Book (P/B)10.12
Price to Sales (P/S)4.08
P/FCF Ratio30.95
Enterprise Value/Market Cap1.07
Enterprise Value/Revenue4.81
Enterprise Value/Gross Profit13.30
Enterprise Value/Ebitda23.94
Forecast
1Y Price Target
$482.55Price Target Upside11.74% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)14.81
Revenue Forecast (FY)$23.19B
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, a...
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 r...
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:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call portrayed a solid, growth-oriented outlook driven by exceptional bookings, record backlog, strong services momentum, robust free cash flow, disciplined capital allocation, and confident 2026 guidance. These positives were balanced against near-term headwinds: residential weakness and intentional production cuts (causing Q4 deleverage), China/Asia softness, margin pressure from M&A and investments, and tariff/input-cost inflation. Management presented clear actions (inventory normalization, hedging, targeted M&A like Stellar Energy) and expects the commercial backlog and applied solutions strength to drive acceleration through 2026.Positive Updates
Record Bookings and Backlog
Enterprise organic bookings increased 22% in Q4, driving a record backlog of $7.8 billion. Commercial HVAC backlog rose ~25% in The Americas and nearly 40% in EMEA versus year-end 2024.
Negative Updates
Residential Market Weakness and Deleverage
Residential bookings were up mid-single digits but residential revenues declined mid-teens in Q4 due to channel inventory normalization. Management reduced factory production days by one-third in Q4 to right-size inventory, causing roughly 60% deleverage in the residential business. Q1 2026 residential is expected to be the trough (~down 20% vs Q1 2025) and the full-year residential outlook is flat to down up to 5%.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Bookings and Backlog
Enterprise organic bookings increased 22% in Q4, driving a record backlog of $7.8 billion. Commercial HVAC backlog rose ~25% in The Americas and nearly 40% in EMEA versus year-end 2024.
Read all positive updates
Company Guidance
Management initiated 2026 guidance calling for 6–7% organic revenue growth and adjusted EPS of $14.65–$14.85 (roughly +12–14%), with ~50 bps of tailwind from FX and ~200 bps from M&A, implying reported revenue growth of 8.5–9.5%; reported incrementals are expected to be ~700 bps lower than organic due to lower‑margin M&A. They are targeting organic operating leverage of ≥25% and free cash flow conversion ≥100%, expect Q1 organic revenue to be roughly flat with Q1 adjusted EPS ≈ $2.50 (Q1 has averaged just under 17% of FY EPS historically), and see residential troughing in Q1 (residential down ~20% Q1, full‑year resi flat to down up to ~5%). Regionally, Americas commercial HVAC is expected to accelerate from ~7–8% in Q1 to ~10% in Q2 and low‑teens in H2 (roughly +10% for the year), supported by a record backlog of $7.8B (commercial HVAC backlog up ~25% Americas, ~40% EMEA) and consecutive quarters of >100% applied bookings; planned capital deployment for 2026 is $2.8–$3.3B (after ~$3.2B deployed/committed in 2025) with $4.7B remaining under the share repurchase authorization.Trane Technologies Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
74
Positive
Cash Flow
88
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 21.32B | 19.84B | 17.68B | 15.99B | 14.14B |
| Gross Profit | 7.71B | 7.08B | 5.86B | 4.96B | 4.47B |
| EBITDA | 4.17B | 3.86B | 3.15B | 2.72B | 2.32B |
| Net Income | 2.92B | 2.57B | 2.02B | 1.76B | 1.42B |
Balance Sheet | |||||
| Total Assets | 21.42B | 20.15B | 19.39B | 18.08B | 18.06B |
| Cash, Cash Equivalents and Short-Term Investments | 1.76B | 1.59B | 1.10B | 1.22B | 2.16B |
| Total Debt | 4.62B | 5.38B | 4.78B | 4.84B | 4.84B |
| Total Liabilities | 12.82B | 12.66B | 12.37B | 11.98B | 11.79B |
| Stockholders Equity | 8.60B | 7.46B | 7.00B | 6.11B | 6.27B |
Cash Flow | |||||
| Free Cash Flow | 2.81B | 2.77B | 2.09B | 1.21B | 1.37B |
| Operating Cash Flow | 3.19B | 3.15B | 2.39B | 1.50B | 1.59B |
| Investing Cash Flow | -640.00M | -562.90M | -1.17B | -540.40M | -545.70M |
| Financing Cash Flow | -2.50B | -2.02B | -1.35B | -1.85B | -2.13B |
Trane Technologies Technical Analysis
Positive
431.85
Price Trends
435.59
Negative
416.24
Positive
420.43
Positive
Market Momentum
-2.53
Negative
52.71
Neutral
79.15
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TT, the sentiment is Positive. The current price of 431.85 is above the 20-day moving average (MA) of 423.11, below the 50-day MA of 435.59, and above the 200-day MA of 420.43, indicating a neutral trend. The MACD of -2.53 indicates Negative momentum. The RSI at 52.71 is Neutral, neither overbought nor oversold. The STOCH value of 79.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TT.
Trane Technologies Risk Analysis
Trane Technologies disclosed 28 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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $95.58B | 29.82 | 36.17% | 0.95% | 8.58% | 20.37% | |
77 Outperform | $13.56B | 18.48 | 36.69% | 1.28% | 0.14% | 3.88% | |
70 Outperform | $81.50B | 36.04 | 23.52% | 1.27% | -10.19% | 100.65% | |
69 Neutral | $46.32B | 178.80 | 10.50% | 1.65% | -7.93% | -35.00% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | $15.68B | 29.73 | 78.89% | 0.96% | 3.77% | 12.46% | |
60 Neutral | $6.59B | 57.78 | 12.63% | 0.53% | 8.77% | -47.50% |
* Industrials Sector Average
TT
Trane Technologies
431.85
92.19
27.14%
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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.