Key Takeaways Q2 EPS estimate is $12.92, up 15.2% YoY; revenue forecast is $21.57B, up 8.7% from last year.Americas HVAC revenues expected to jump 10.1% to $4.7B; EMEA revenues projected at $677.5M.TT has an Earnings ESP of +0.54% and a Zacks Rank #3, signaling an earnings beat.Trane Technologies plc (TT) is set to report second-quarter 2025 earnings on July 30, before the bell.The Zacks Consensus Estimate for earnings is pegged at $12.92 per share, indicating 15.2% year-over-year growth. The Zacks Consensu ...

Trane Technologies (TT) closed at $442.48 in the latest trading session, marking a -1.08% move from the prior day. The stock's change was less than the S&P 500's daily gain of 0.14%. Elsewhere, the Dow saw a downswing of 0.04%, while the tech-heavy Nasdaq appreciated by 0.38%. The stock of manufacturer has risen by 6.58% in the past month, lagging the Construction sector's gain of 8.47% and overreaching the S&P 500's gain of 5.35%.The upcoming earnings release of Trane Technologies will be of great interest ...

Company Performance - Trane Technologies (TT) closed at $437.41, reflecting a +1.18% increase from the previous day, outperforming the S&P 500's daily gain of 0.52% [1] - Over the last month, TT's shares increased by 0.47%, lagging behind the Construction sector's gain of 1.98% and the S&P 500's gain of 4.27% [1] Upcoming Financial Results - Trane Technologies is expected to report an EPS of $3.76, which represents a 13.94% increase from the prior-year quarter [2] - The consensus estimate for revenue is $5.76 billion, indicating an 8.49% increase compared to the year-ago quarter [2] Full-Year Estimates - The Zacks Consensus Estimates for TT's full-year earnings are $12.89 per share and revenue of $21.51 billion, reflecting year-over-year changes of +14.88% and +8.41%, respectively [3] - Recent changes to analyst estimates suggest a positive outlook for the company's near-term business trends [3] Valuation Metrics - Trane Technologies is currently trading at a Forward P/E ratio of 33.55, which is a premium compared to the industry average Forward P/E of 30.74 [6] - The company has a PEG ratio of 2.84, higher than the industry average PEG ratio of 2.09 [6] Industry Context - The Building Products - Air Conditioner and Heating industry, which includes Trane Technologies, has a Zacks Industry Rank of 192, placing it in the bottom 22% of over 250 industries [7] - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Market Overview - The United States HVAC Equipment Market is projected to grow from USD 22.44 billion in 2024 to USD 41.22 billion by 2033, with a compound annual growth rate (CAGR) of 6.99% from 2025 to 2033 [1][20]. Growth Drivers - The demand for smart and energy-efficient HVAC systems is increasing due to urbanization, population growth, and climate change, making climate control systems essential in both residential and commercial sectors [2][4]. - Technological advancements such as automation, eco-friendly refrigerants, and IoT integration are driving innovation in the HVAC market, with major companies investing in high-performance systems [3][4]. - The focus on health and air quality, especially post-pandemic, is boosting the HVAC sector as air filtration systems become standard in building designs [4][10]. - The U.S. government's initiatives to enhance energy efficiency through building rehabilitation programs are reducing energy costs and greenhouse gas emissions, further supporting market growth [5][6]. Market Trends - The rise in consumer awareness regarding sustainability and energy efficiency is propelling the adoption of smart home technologies, which is expected to sustain market growth [7][8]. - The increasing emphasis on indoor air quality has led to a surge in demand for HVAC systems with advanced filtration and purification capabilities [10][11]. - Rapid urbanization and construction growth are driving the need for reliable and energy-efficient HVAC systems in metropolitan areas [12][13]. Challenges - The HVAC market faces intense competition, with established players and new entrants vying for market share, necessitating continuous innovation and investment in R&D [15][16]. - A significant shortage of skilled labor in the HVAC sector is impacting installation and maintenance services, potentially leading to project delays and increased costs [17][18]. Key Players - Major companies in the HVAC market include Carrier, Trane, Lennox, Rheem, and Mitsubishi Electric, which are focusing on developing energy-efficient and sustainable solutions [3][22].

Group 1 - Trane Technologies closed at $426.61, with a +1.24% increase, outperforming the S&P 500's gain of 0.94% [1] - The company had previously experienced a loss of 1.79%, which was less than the Construction sector's loss of 2.43% [1] Group 2 - The upcoming EPS for Trane Technologies is projected at $3.76, indicating a 13.94% increase year-over-year, with quarterly revenue expected to be $5.76 billion, up 8.49% from the previous year [2] - For the fiscal year, earnings are projected at $12.89 per share and revenue at $21.51 billion, reflecting increases of +14.88% and +8.41% respectively [3] Group 3 - Recent analyst estimate revisions for Trane Technologies suggest positive short-term business trends, which are correlated with near-term share price momentum [3][4] - The Zacks Rank system, which assesses estimate changes, currently ranks Trane Technologies at 3 (Hold) [5] Group 4 - Trane Technologies has a Forward P/E ratio of 32.71, which is higher than the industry average of 30.42 [6] - The company's PEG ratio stands at 2.77, compared to the industry average PEG ratio of 2 [7] Group 5 - The Building Products - Air Conditioner and Heating industry, which includes Trane Technologies, has a Zacks Industry Rank of 95, placing it in the top 39% of over 250 industries [8]

Investor Presentation Additional factors that could cause such differences can be found in our Form 10-K for the year ended December 31, 2024, as well as our subsequent reports on Form 10-Q and other SEC filings. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events and how they may affect the Company. We assume no obligation to update these forward-looking statements. This presentation also includes non-GAAP financial information, which should be considere ...

Core Viewpoint - Trane Technologies (TT) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling actions that affect stock prices [4]. Company Performance Indicators - Trane Technologies is projected to earn $12.88 per share for the fiscal year ending December 2025, reflecting a year-over-year increase of 14.8% [8]. - Over the past three months, the Zacks Consensus Estimate for Trane Technologies has risen by 0.5%, indicating a positive trend in earnings expectations [8]. Zacks Rank System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - Only the top 20% of Zacks-covered stocks receive a 'Strong Buy' or 'Buy' rating, highlighting their superior earnings estimate revision characteristics [9][10].

Summary of Trane Technologies (TT) FY Conference Call - May 21, 2025 Company Overview - **Company**: Trane Technologies (TT) - **Industry**: Commercial HVAC and related technologies Key Financial Performance - **Revenue Growth**: Reported a 12% CAGR over the last four years [4] - **EPS Growth**: Achieved over 20% EPS growth each year for the past four years [5] - **Free Cash Flow**: Average of 108% free cash flow as a percentage of net income over the last four years [5] - **2025 Guidance**: Expected revenue growth of 78% and EPS between $12.70 to $12.90, with a strong outlook for free cash flow [5] Business Segments and Market Trends - **Americas Focus**: The Americas is the largest and most important region for Trane, with a strong emphasis on customer service and innovation [8][9] - **Commercial HVAC Growth**: Significant growth in the commercial HVAC sector, with applied business growth of 200% over the last four years [10] - **Product Innovation**: Launched 190 new products last year, indicating a strong innovation pipeline [10] - **Residential Market**: Experienced high teens growth in the first quarter, but expects mid-single digits for the total year due to market conditions [14][16] - **Tariff Impact**: Estimated unmitigated impact from tariffs at $250 to $275 million, with recent changes potentially reducing this amount [21][22] Competitive Advantages - **Manufacturing Strategy**: 95% of products sold in the U.S. are manufactured domestically, providing a competitive edge over competitors reliant on imports [25][32] - **Supply Chain Resilience**: Focus on regional manufacturing and a robust supply chain strategy to mitigate tariff impacts and ensure operational flexibility [23][24] Market Dynamics - **Transport Market**: Anticipated decline of 20% in the transport market, with expectations of recovery in 2026 and 2027 [39][40] - **Applied Systems**: Strong growth in applied systems, with a healthy pipeline and a focus on diverse verticals [46][48] - **K-12 Education**: Stable environment in K-12 education, with ongoing opportunities despite reduced funding from ESSER [52][54] Technology and Future Outlook - **Brainbox AI Acquisition**: Acquisition of Brainbox AI enhances building automation capabilities, expected to save customers up to 25% on energy costs [80][81] - **Cloud-Based Solutions**: Introduction of cloud-based building management systems to improve operational efficiency [82] - **Long-Term Growth**: Confidence in continued growth across various verticals, with a focus on innovation and customer service [46][60] Additional Insights - **Market Divergence**: Notable divergence in market performance across different sectors, with some experiencing growth while others face challenges [13] - **Data Center Growth**: Data centers remain a strong vertical, with normalized order rates providing better visibility for future growth [61] This summary encapsulates the key points discussed during the Trane Technologies FY Conference Call, highlighting the company's financial performance, market dynamics, competitive advantages, and future growth strategies.

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Trane Technologies (TT) - Trane Technologies currently holds a Momentum Style Score of B, indicating a positive momentum outlook [2] - The company has a Zacks Rank of 2 (Buy), suggesting strong potential for outperformance in the market [3] Performance Metrics - Over the past week, TT shares have increased by 14.83%, outperforming the Zacks Building Products - Air Conditioner and Heating industry, which rose by 7.6% [5] - In a longer timeframe, TT's monthly price change is 18.8%, compared to the industry's 9.38% [5] - Over the last quarter, TT shares have risen by 12.6%, and over the past year, they have increased by 24.31%, while the S&P 500 has seen declines of -6.34% and a modest increase of 9.94%, respectively [6] Trading Volume - The average 20-day trading volume for TT is 1,585,443 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, 5 earnings estimates for TT have been revised upwards, while only 1 has been revised downwards, leading to an increase in the consensus estimate from $12.81 to $12.88 [9] - For the next fiscal year, 7 estimates have moved upwards with no downward revisions, indicating a positive earnings outlook [9] Conclusion - Considering the positive momentum indicators and earnings revisions, TT is positioned as a 2 (Buy) stock with a Momentum Score of B, making it a strong candidate for near-term investment [11]

Summary of Trane Technologies (TT) FY Conference Call Company Overview - **Company**: Trane Technologies (TT) - **Event**: Oppenheimer's twentieth Annual Industrial Growth Conference - **Date**: May 05, 2025 Key Industry Insights Commercial HVAC - **Payback Periods**: Average payback for retrofit projects is around three years, with some cases extending to four or five years. This is an improvement from previous years due to enhanced product efficiency, which has increased by 50% to 70% over the last seven years [5][6][8]. - **Pipeline Definition**: Trane defines its pipeline as unfactored (all known projects) and factored (based on probability and timing). The company reports strong pipelines across various verticals in the Americas [6][8]. - **Sales Force Dynamics**: The direct sales force is regionally focused, understanding local regulations and customer needs, which aids in project conversion and customer engagement [10][12][13]. Vertical Performance - **Growth Verticals**: Data centers and higher education sectors are showing continued growth. The company has not seen a significant impact from the end of ESSER funding on the education sector [18][20][22]. - **Weaker Verticals**: The life sciences and certain office spaces (Class B and C) have been softer, but Class A office spaces are experiencing tight market conditions, enhancing HVAC demand [17][14]. Regional Performance - **Asia**: Represents less than 8% of enterprise revenues, with China showing a soft market but moderate improvement. The rest of Asia is performing strongly [25][28]. - **EMEA**: Strong performance in commercial HVAC with double-digit order growth. The transport market is expected to decline slightly, but Trane's innovation is expected to drive demand [29][30]. Financial Performance Pricing and Margins - **Pricing Strategy**: The company has successfully implemented price increases in response to inflation, delivering 10% price increases in 2022 and 5% in 2023. The focus is on maintaining gross margin dollar neutrality while managing costs [52][54]. - **Cost Management**: Trane is actively working to mitigate tariff impacts through supply chain adjustments and surgical pricing strategies [50][56]. Inventory and Transition - **Channel Inventory**: Elevated channel inventory is estimated at $75 million to $100 million, primarily consisting of R-454B products. The transition from R-410A to R-454B has been smooth, with 80% of sales in the first quarter being R-454B [36][37]. Innovation and Technology - **Digital Solutions**: The acquisition of Brainbox AI is expected to enhance Trane's digital offerings, allowing for better energy management and cost savings for customers [74][75]. - **Service Growth**: The services segment, linked to commercial HVAC, has shown strong growth and is expected to continue contributing positively to margins [44]. Competitive Landscape - **Market Position**: Trane Technologies is positioned to gain market share due to its regional manufacturing strategy, which mitigates tariff impacts and allows for competitive pricing [62][63]. Capital Allocation - **M&A Strategy**: The company is focused on acquiring early-stage technologies that align with its sustainability goals and enhancing its market presence in Europe and other regions [73][75]. Conclusion Trane Technologies is experiencing robust growth in its commercial HVAC segment, driven by improved efficiency, a strong sales force, and strategic regional focus. The company is well-positioned to navigate market challenges through effective pricing strategies, innovation, and capital allocation.