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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on TT

Trane Technologies' recent performance was negatively impacted by several factors. A UBS Group analyst downgrade, citing a reduced price target from $544.00 to $520.00, contributed to the decline. Additionally, several institutional investors, including Anchor Capital Advisors LLC, Brentview Investment Management LLC, and Arcadia Investment Management Corp MI, decreased their positions in the company. Furthermore, Trane Technologies' stock experienced a significant gap down prior to a recent earnings report, despite expectations of flat EPS estimates and rising revenue. However, the company eventually reported a strong Q4, with earnings and revenue beats.

1.c. Company Highlights

2. Trane Technologies' Strong Q4 2025 Earnings: A Deeper Dive

Trane Technologies reported a robust fourth-quarter 2025 earnings, with actual EPS coming in at $2.86, beating estimates of $2.81. The company's organic revenue grew 4%, driven by the Americas commercial HVAC businesses and global services business. The strong performance was also reflected in the adjusted EPS growth of 10% and robust free cash flow. The company's revenue compound annual growth rate stood at 11% since 2020, while the adjusted EPS compound annual growth rate was 24%.

Publication Date: Feb -01

📋 Highlights
  • Record Backlog: $7.8 billion backlog at end-2025, up 22% in bookings and 30%+ growth in pharma projects for 2026-2027.
  • Organic Revenue Growth: 4% in Q4 2025 led by Americas commercial HVAC (10% growth) and global services, with 6-7% organic growth guidance for 2026.
  • Adjusted EPS Momentum: 10% growth in Q4 and 24% CAGR since 2020, with 2026 guidance of $14.65-$14.85 (12-14% growth).
  • Capital Allocation: $3.2B deployed in 2025 (dividends: $840M, buybacks: $1.5B) and $2.8-$3.3B expected in 2026, maintaining robust free cash flow.
  • Data Center & Innovation: Stellar acquisition and liquid cooling advancements driving growth; 100%+ applied orders in Q4, with $1B+ pharma backlog and EMEA data center market acceleration.

Segmental Performance

The Americas commercial HVAC business was a key driver of growth, with bookings up 35% in the fourth quarter. The company's services business also performed well, with robust growth driven by the chiller and data center segments. The residential HVAC market is expected to be flat to modestly lower in 2026, with the company anticipating a return to growth in the second half. The EMEA region is expected to see robust growth, driven by data center growth and a strong backlog.

Guidance and Outlook

For 2026, the company guides for 6-7% organic revenue growth and adjusted EPS of $14.65-$14.85, representing 12-14% growth. The company expects the Americas commercial HVAC business to accelerate in the second half, driven by a strong backlog and robust pipelines. The guidance also assumes a price-cost dynamic that is expected to be favorable, with around 1.5 points of price growth for the year.

Valuation and Metrics

With a P/E Ratio of 32.22 and an EV/EBITDA of 22.81, the company's valuation appears to be premium. However, the strong growth prospects and robust backlog may justify the valuation. The company's ROIC of 20.26% and ROE of 36.17% are also indicative of its strong profitability. The Dividend Yield of 0.89% and Free Cash Flow Yield of 3.04% provide a relatively stable return to investors.

Key Drivers and Risks

The company's growth is driven by its strong presence in multiple verticals, including data centers, commercial HVAC, and services. The data center segment is expected to continue to be a key driver, with the company's innovation in thermal management, including liquid cooling, expected to play a crucial role. However, the company's performance is not without risks, including the potential impact of raw material inflation and changes in customer lead times.

Capital Allocation

The company remains committed to its balanced capital allocation strategy, with a focus on deploying excess cash to maximize shareholder returns. In 2025, the company deployed approximately $3.2 billion through its capital allocation strategy, including $840 million to dividends, $720 million to M&A, and $1.5 billion to share repurchases. For 2026, the company expects to deploy $2.8-$3.3 billion, with a strong free cash flow and ample liquidity.

3. NewsRoom

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Trane Technologies Completes Acquisition of Stellar Energy

Feb -18

Source: businesswire.com

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Trane Technologies plc (TT) Presents at Citi's Global Industrial Tech & Mobility Conference 2026 Transcript

Feb -18

Source: seekingalpha.com

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VNT vs. TT: Which Stock Is the Better Value Option?

Feb -18

Source: zacks.com

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Trane Technologies plc (TT) Presents at Barclays 43rd Annual Industrial Select Conference Transcript

Feb -17

Source: seekingalpha.com

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Carrier Global’s Quiet Dividend Strategy Deserves Attention

Feb -14

Source: 247wallst.com

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Atria Investments Inc Sells 2,085 Shares of Trane Technologies plc $TT

Feb -12

Source: defenseworld.net

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Trane Technologies to Acquire LiquidStack to Accelerate End‑to‑End Data Center Thermal Management Solutions

Feb -10

Source: businesswire.com

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Trane Technologies: Upgrade To Buy On Cheaper Valuation And Better Fundamentals

Feb -04

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.57%)

6. Segments

Americas

Expected Growth: 5.7%

Growing demand for energy-efficient HVAC solutions and increasing adoption of transport refrigeration solutions in the US, Canada, and Latin America drive growth for Trane Technologies’ Americas segment.

Europe, Middle East & Africa

Expected Growth: 5.5%

Growing demand for energy-efficient climate control solutions, increasing adoption of digital technologies, and stringent government regulations drive growth in Trane Technologies’ EMEA region.

Asia Pacific

Expected Growth: 4.2%

Growing demand for energy-efficient HVAC systems, increasing infrastructure development, and rising adoption of IoT-based building management systems drive Trane Technologies’ Asia Pacific segment growth.

7. Detailed Products

Heating, Ventilation and Air Conditioning (HVAC) Systems

Trane Technologies provides a range of HVAC systems for residential, commercial, and industrial applications, including air conditioners, heat pumps, furnaces, and boilers.

Building Management Systems (BMS)

Trane Technologies offers BMS solutions that integrate HVAC, lighting, security, and other building systems to optimize energy efficiency and building performance.

Refrigeration Systems

Trane Technologies provides refrigeration systems for supermarkets, cold storage facilities, and industrial processes, ensuring optimal temperature control and food safety.

Transport Refrigeration Systems

Trane Technologies offers transport refrigeration systems for trucks, trailers, and containers, ensuring temperature control during transportation of perishable goods.

Air Quality and Filtration Systems

Trane Technologies provides air quality and filtration systems for residential, commercial, and industrial applications, improving indoor air quality and reducing airborne contaminants.

Energy Services and Solutions

Trane Technologies offers energy services and solutions, including energy audits, retro-commissioning, and energy management systems, to help customers reduce energy consumption and costs.

8. Trane Technologies plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Trane Technologies plc operates in the HVAC industry, where substitutes are limited. However, the increasing popularity of renewable energy sources and energy-efficient solutions could pose a moderate threat to the company's products.

Bargaining Power Of Customers

Trane Technologies plc has a diverse customer base, including commercial, industrial, and residential customers. The company's strong brand reputation and wide range of products reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Trane Technologies plc relies on a network of suppliers for components and materials. While the company has some bargaining power due to its size, suppliers of specialized components may have some negotiating power.

Threat Of New Entrants

The HVAC industry has high barriers to entry, including significant capital requirements and regulatory hurdles. New entrants would need to invest heavily in research and development, manufacturing, and marketing to compete with established players like Trane Technologies plc.

Intensity Of Rivalry

The HVAC industry is highly competitive, with several established players competing for market share. Trane Technologies plc faces intense competition from companies like Carrier Global Corporation, Johnson Controls International plc, and Lennox International Inc.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 40.59%
Debt Cost 6.09%
Equity Weight 59.41%
Equity Cost 9.90%
WACC 8.35%
Leverage 68.33%

11. Quality Control: Trane Technologies plc passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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BAE Systems

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Value: 2.4

Growth: 6.8

Quality: 4.9

Yield: 5.0

Momentum: 4.5

Volatility: 6.0

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Geberit

A-Score: 4.9/10

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Growth: 3.6

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Yield: 1.9

Momentum: 6.5

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Trane Technologies

A-Score: 4.9/10

Value: 1.3

Growth: 7.3

Quality: 7.4

Yield: 2.5

Momentum: 4.0

Volatility: 6.7

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Quality: 5.7

Yield: 6.9

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A-Score: 4.8/10

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Growth: 5.8

Quality: 4.5

Yield: 4.4

Momentum: 4.0

Volatility: 5.3

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Johnson Controls

A-Score: 4.6/10

Value: 0.8

Growth: 3.4

Quality: 5.2

Yield: 3.8

Momentum: 8.0

Volatility: 6.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

467.12$

Current Price

467.12$

Potential

-0.00%

Expected Cash-Flows