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Trane Technologies (TT)
NYSE:TT
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Trane Technologies
(NYSE:TT)68Neutral
Positive Factors
Financial Performance
Trane's 4Q24 revenue and EPS came in above both estimates and consensus, driven by better than forecast Americas and APAC segments.
Operational Efficiency
Operating margins expanded significantly in the Americas and EMEA, indicating efficient operational execution.
Negative Factors
Market Challenges
Asia-Pacific orders decreased by 31%, with significant declines in China, reflecting a slowdown in non-residential markets.
Trane Technologies (TT) vs. S&P 500 (SPY)
Market Cap
$76.98B
Dividend Yield0.98%
Average Volume (3M)1.73M
Price to Earnings (P/E)30.5
Beta (1Y)1.45
Revenue Growth12.22%
EPS Growth28.13%
CountryUS
Employees45,000
SectorIndustrials
Sector Strength66
IndustryConstruction
Share Statistics
EPS (TTM)11.25
Shares Outstanding224,290,970
10 Day Avg. Volume1,884,474
30 Day Avg. Volume1,734,478
Financial Highlights & Ratios
PEG Ratio1.09
Price to Book (P/B)N/A
Price to Sales (P/S)3.91
Price to Cash Flow (P/CF)21.60
P/FCF Ratio20.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$426.82Price Target Upside22.42% Upside
Rating ConsensusHold
Number of Analyst Covering12
Trane Technologies Business Overview & Revenue Model
Company DescriptionIreland-based Trane Technologies plc is a diversified industrial manufacturing company formed by the merger of Ingersoll-Sergeant Drill Company and Rand Drill Company. The company provides climate control solutions for buildings, homes, and transportation.
How the Company Makes MoneyTrane Technologies generates revenue through the sale of its HVAC systems, which include air conditioners, furnaces, heat pumps, and ventilation products. In addition to equipment sales, the company offers installation, maintenance, and repair services, which constitute a significant portion of its income. Trane Technologies also provides building automation and energy management solutions, which help clients optimize energy usage and reduce costs. The company collaborates with various partners and stakeholders to innovate and expand its offerings, focusing on sustainability and efficiency as key value propositions. Revenue is further supported by its global presence and the continuous demand for energy-efficient climate solutions.
Trane Technologies Financial Statement Overview
Summary
Trane Technologies exhibits strong financial health with consistent revenue and profit growth, efficient operational management, and solid cash flow generation. The company balances its leverage effectively, although there is some dependency on debt. The incomplete TTM data limits a complete current assessment, but historical data depicts a robust financial position.Income Statement
Trane Technologies has demonstrated solid revenue growth over the years, with Total Revenue increasing from $12.45 billion in 2020 to $17.68 billion in 2023. The Gross Profit Margin in 2023 was 33.1%, a strong indicator of profitability. However, the TTM data shows zero revenue, likely an error or incomplete data, affecting the assessment. Net Profit Margin stood at 11.5% in 2023, indicating efficient control over costs. The company maintains a healthy EBIT and EBITDA margin, with 16.4% and 17.8% respectively in 2023, showcasing operational efficiency.70
Positive
Balance Sheet
The Debt-to-Equity ratio in 2023 was approximately 0.68, which reflects a reasonable level of leverage for a construction industry company. The Return on Equity (ROE) was around 28.9% in 2023, indicating effective management and strong returns for shareholders. However, the Equity Ratio was approximately 36.1%, suggesting a heavy reliance on debt for financing. The zero values in the TTM data indicate missing data that hampers a complete evaluation.65
Positive
Cash Flow
Trane Technologies had a strong Free Cash Flow growth rate, with Free Cash Flow increasing to $2.09 billion in 2023. The Operating Cash Flow to Net Income ratio was about 1.18 in 2023, indicating healthy cash generation relative to net income. The Free Cash Flow to Net Income ratio of approximately 1.03 in 2023 shows solid cash conversion. The TTM data is incomplete, affecting precise analysis.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 19.84B | 17.68B | 15.99B | 14.14B | 12.45B | Gross Profit |
| 7.08B | 5.86B | 4.96B | 4.47B | 3.80B | EBIT |
| 3.50B | 2.89B | 2.42B | 2.02B | 1.53B | EBITDA |
| 3.86B | 3.15B | 2.72B | 2.32B | 1.83B | Net Income Common Stockholders |
| 3.50M | 2.02B | 1.76B | 1.42B | 854.90M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.59B | 1.10B | 1.22B | 2.16B | 3.29B | Total Assets |
| 20.15B | 19.39B | 18.08B | 18.06B | 18.16B | Total Debt |
| 4.00B | 4.78B | 4.84B | 4.84B | 5.27B | Net Debt |
| 4.00B | 3.68B | 3.62B | 2.68B | 1.98B | Total Liabilities |
| 12.66B | 12.37B | 11.98B | 11.79B | 11.73B | Stockholders Equity |
| 7.46B | 7.00B | 6.11B | 6.27B | 6.43B |
| Cash Flow | Free Cash Flow | |||
| 2.81B | 2.09B | 1.21B | 1.37B | 1.29B | Operating Cash Flow |
| 3.18B | 2.39B | 1.50B | 1.59B | 1.44B | Investing Cash Flow |
| -562.90M | -1.17B | -540.40M | -545.70M | -376.20M | Financing Cash Flow |
| -2.02B | -1.35B | -1.85B | -2.13B | 884.30M |
Trane Technologies Technical Analysis
Negative
348.65
Price Trends
369.38
Negative
385.02
Negative
363.92
Negative
Market Momentum
-7.15
Positive
41.39
Neutral
26.81
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 348.65 is below the 20-day moving average (MA) of 356.02, below the 50-day MA of 369.38, and below the 200-day MA of 363.92, indicating a bearish trend. The MACD of -7.15 indicates Positive momentum. The RSI at 41.39 is Neutral, neither overbought nor oversold. The STOCH value of 26.81 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 30 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
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $53.41B | 30.89 | 11.01% | 1.83% | -4.53% | -14.72% | |
75 Outperform | $20.39B | 25.42 | 94.91% | 0.78% | 7.21% | 36.45% | |
74 Outperform | $64.30B | 27.12 | 9.14% | 1.85% | 10.29% | 22.72% | |
70 Outperform | $53.63B | 132.23 | 23.17% | 1.28% | 8.62% | 163.53% | |
68 Neutral | $76.98B | 30.53 | 0.05% | 0.98% | 12.22% | 28.13% | |
68 Neutral | $135.18B | 23.89 | 596.13% | 2.13% | 5.05% | 2.73% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
TT
Trane Technologies
348.65
64.34
22.63%
EMR
Emerson Electric Company
115.84
7.99
7.41%
HON
Honeywell International
209.62
13.28
6.76%
JCI
Johnson Controls
82.22
22.95
38.72%
LII
Lennox International
588.07
116.83
24.79%
CARR
Carrier Global
64.87
7.84
13.75%
Trane Technologies Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: -4.22% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
Trane Technologies reported strong financial performance in 2024 with record revenue and EPS growth, driven by robust demand in Commercial HVAC and strategic investments. Despite challenges in transport refrigeration and softness in China, the company's strong backlog and positive outlook for 2025 suggest continued growth opportunities. The sentiment is overall positive due to the strong highlights outweighing the lowlights.Highlights
Record Organic Revenue and EPS Growth
Trane Technologies achieved a 10% organic revenue growth and a 20% adjusted EPS growth in Q4 2024. For the full year, organic revenue grew by 12% and adjusted EPS by 24%.
Significant Backlog and Bookings
The company entered 2025 with a backlog of $6.75 billion and reported a strong book-to-bill ratio of 102% for the full year, indicating continued demand and future revenue visibility.
Strong Performance in Commercial HVAC
Commercial HVAC bookings in the Americas and EMEA were strong, with bookings up more than 30% on a three-year stack. Applied systems revenue growth was up over 120% in the Americas and 90% in EMEA.
Positive Outlook for 2025
Trane Technologies provided guidance for 2025 with 7% to 8% organic revenue growth and 13% to 15% EPS growth. The company expects strong free cash flow conversion of 100% or greater.
Continued Investment and Strategic Acquisitions
The company deployed $2.5 billion in 2024 for dividends, M&A, and share repurchases. Notable acquisitions include BrainBox AI to enhance service offerings.
Lowlights
Challenges in Transport Refrigeration
Transport refrigeration bookings were down high 20s, with revenues down low-teens, influenced by market volatility and a challenging first half of 2025 expected.
Softness in China
In China, bookings were down low-single-digits and revenues declined by low-teens due to tightened credit policies, impacting the first half of 2025.
Pre-buy Impact in Residential Markets
A pre-buy in residential HVAC impacted Q4 2024, with expected carryover effects into Q1 2025, influencing residential revenue growth.
Company Guidance
In the fourth quarter of 2024, Trane Technologies experienced a robust financial performance, driven by strategic investments and a strong market demand for its innovative solutions. The company reported a 10% organic revenue growth, with the Americas segment achieving high-single-digit growth in Commercial HVAC bookings and low-teens growth in residential revenues. Adjusted EBITDA margins expanded by 110 basis points, contributing to a 20% increase in adjusted EPS. Trane Technologies also recorded an impressive free cash flow of $2.8 billion, resulting in a 109% conversion rate. The company's backlog stood at $6.75 billion, with a book-to-bill ratio of 102%, positioning it well for continued success in 2025. The guidance for 2025 projects a 7% to 8% organic revenue growth, with adjusted EPS expected to grow by 13% to 15%, reflecting Trane Technologies' confidence in maintaining its market leadership and delivering differentiated shareholder value.Trane Technologies Corporate Events
Executive/Board Changes
Trane Technologies Appoints Matthew Pine to Board
Positive
Feb 6, 2025
On February 6, 2025, Trane Technologies announced the appointment of Matthew Pine, President and CEO of Xylem Inc., to its Board of Directors, effective April 1, 2025. Pine’s extensive experience in global leadership and sustainability is expected to enhance Trane Technologies’ long-term value creation and support its commitment to a sustainable future.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.