Trane Technologies (TT)
Industrials · $92.2B market cap · SEC CIK 0001466258
ahead of 79% of the S&P 500 · #12 of 79 in Industrials
Next reports on Jan 25, 2027, after the close, with analysts expecting $3.59 in earnings per share.
52-week range $348.06 to $505.87. 17% below its 52-week high and 21% above its low.
The case for TT
- Earns 36% back on shareholder equity.
- Revenue growing 10.3% year over year.
- Has compounded revenue at 11.3% a year over five years.
- Pays a modest 1.3% dividend.
The case against
- The price trend is weak (38/100): −3.2% over a year, −11.8% over three months, 17% below its 52-week high.
- Weakest against its peers: free-cash-flow yield of 3.0% is lower than 70% of Industrials companies.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Industrials companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 66 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 76 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 66 |
| Momentumhow the price has behaved lately | 38 |
| Stabilityhow violently it moves, what it owes and what it pays you | 70 |
- Each factor except momentum is half fixed thresholds, half rank among the 79 Industrials companies.
The financials
Revenue growth
Is the business growing? Yes
| Last 12 months | +10.3% |
|---|---|
| Over 5 years | +11.3% a year |
| FY2025 revenue | $21.3B (+7%) |
Free cash flow
Is it generating real cash? Yes
| FY2025 free cash flow | $2.8B |
|---|---|
| Of revenue | 13% |
| Of profit | 96% |
Profit margins
Is profitability improving? Holding steady
| Gross margin | 35% |
|---|---|
| Operating margin | 18% |
| Net margin, FY24 → FY25 → now | 12.9% → 13.7% → 13.6% |
Debt vs. cash
Is the balance sheet healthy? Yes, the debt is manageable
| Cash | $1.8B |
|---|---|
| Long-term debt | $3.9B |
| Net debt | $2.2B |
| Years to repay | 1.2 yrs |
Valuation
Is the stock price reasonable? Yes, about fair
| P/E | 29.3× |
|---|---|
| Fair P/E for its growth | 36× |
| P/FCF | 32.8× |
| Forward P/E | 23.7× |
| EV / EBITDA | 20.8× |
At 29.3× earnings it trades below the 36× that 17% a year of growth plus a 1.3% dividend would justify. At 32.8× free cash flow it trades close to that same mark.
The financials, five years deep
Pulled from Trane Technologies's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $21.3B | $19.8B | $17.7B | $16.0B | $14.1B |
| Change on the year | +7% | +12% | +11% | +13% | — |
| Free cash flow | |||||
| Free cash flow | $2.8B | $2.8B | $2.1B | $1.2B | $1.4B |
| Of revenue | 13% | 14% | 12% | 8% | 10% |
| Profit margins | |||||
| Operating margin | 18.6% | 17.6% | 16.4% | 15.1% | 14.3% |
| Net margin | 13.7% | 12.9% | 11.4% | 11.0% | 10.1% |
| Debt vs. cash | |||||
| Cash | $1.8B | $1.6B | $1.1B | $1.2B | $2.2B |
| Long-term debt | $3.9B | $4.3B | $4.0B | $3.8B | $4.5B |
| Net cash (debt) | −$2.2B | −$2.7B | −$2.9B | −$2.6B | −$2.3B |
What Trane Technologies says it does
Overview Trane Technologies plc, a public limited company, incorporated in Ireland in 2009, and its consolidated subsidiaries (collectively we, us, our, the Company) is a global climate innovator. We bring sustainable and efficient solutions to buildings, homes and transportation through our strategic brands, Trane ® and Thermo King ® , and our environmentally responsible portfolio of products, services and connected intelligent controls. We generate revenue and cash primarily through the design, manufacture, sales and service of solutions for Heating, Ventilation and Air Conditioning (HVAC), transport refrigeration, and custom refrigeration solutions. As an industry leader with an extensive global install base, our growth strategy includes expanding recurring revenue through services and rental options. Our unique business operating system, uplifting culture and highly engaged team around the world are also central to our earnings and…
Risk factors TT lists in its 10-K
- Our global operations subject us to economic risks
- Commodity and raw material shortages, supply chain risks and price increases could adversely affect our financial results
- We face significant competition in the markets that we serve
- Our growth is dependent, in part, on the timely development, commercialization and acceptance of new and enhanced products and services
- Capital and credit market conditions could adversely affect our business operations, investments, and financial performance
- Currency exchange rate fluctuations and other related risks may adversely affect our results
- Changes in U.S. or foreign trade policies and other factors beyond our control may adversely impact our business and operating results
- World geopolitical conflicts have created humanitarian crises, materially impacted economic activities, and may materially impact our global and regional operations
- The full extent to which public health crises will affect us will depend on future developments that are highly uncertain and cannot be accurately predicted
- Material adverse legal judgments, fines, penalties or settlements could adversely affect our results of operations, and our financial condition
- The Aldrich and Murray Chapter 11 cases involve various risks and uncertainties that could have a material effect on us
- We are subject to risks relating to our information technology systems
- Security breaches or disruptions of the technology systems, infrastructure or products of the Company or our vendors could negatively impact our business and financial results
- Data privacy and protection laws are evolving and present increasing compliance challenges
- Intellectual property infringement claims of others and the inability to protect our intellectual property rights could harm our competitive position
- Our reputation, ability to do business and results of operations could be impaired by improper conduct by any of our employees, agents, business partners, or other third parties
- Our operations are subject to regulatory risks
- Global climate change and related regulations could negatively affect our business
- Natural disasters or other unexpected catastrophic events may disrupt our operations and our supply chain, and may adversely affect our results of operations and financial condition, and may not be fully covered by insurance
- Our business success depends on attracting, developing, and retaining highly qualified talent
- Our business may be adversely affected by temporary work stoppages, union negotiations, labor disputes and other matters associated with our labor force
- Irish law differs from the laws in effect in the United States and may afford less protection to holders of our securities
- Dividends and share repurchases are subject to uncertainty and could be modified, accelerated, or discontinued, which could affect the price of our common stock
- Dividends received by our shareholders may be subject to Irish dividend withholding tax
- Dividends received by our shareholders could be subject to Irish income tax