Company Overview - Trane Technologies (TT) currently holds a Momentum Style Score of B, indicating a positive outlook based on its price change and earnings estimate revisions [2][3] - The company has a Zacks Rank of 2 (Buy), which suggests strong potential for outperformance in the market [3] Price Performance - Over the past week, TT shares increased by 1.15%, while the Zacks Technology Services industry experienced a decline of 0.3% [5] - In a longer time frame, TT's monthly price change is 13.04%, significantly outperforming the industry's 1.96% [5] - Over the last quarter, TT shares have risen by 14.47%, and they have gained 91.05% over the past year, compared to the S&P 500's increases of 2.69% and 33.98%, respectively [6] Trading Volume - The average 20-day trading volume for TT is 996,454 shares, which serves as a baseline for price-to-volume analysis [7] Earnings Outlook - In the past two months, three earnings estimates for TT have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $10.76 to $10.88 [9] - For the next fiscal year, three estimates have also moved upwards without any downward revisions [9] Conclusion - Considering the positive price momentum, strong earnings outlook, and favorable trading volume, TT is positioned as a solid momentum pick with a 2 (Buy) rating and a Momentum Score of B [9]

Company Performance - Trane Technologies' shares have increased by 6.3% over the past month, reaching a new 52-week high of $370.22, and have gained 51.3% since the start of the year, outperforming the Zacks Business Services sector (14.2%) and the Zacks Technology Services industry (24.3%) [1] - The company has consistently exceeded earnings expectations, reporting an EPS of $3.3 against a consensus estimate of $3.08 in its last earnings report on July 31, 2024 [2] Financial Projections - For the current fiscal year, Trane Technologies is projected to achieve earnings of $10.87 per share on revenues of $19.54 billion, reflecting a 20.24% increase in EPS and a 10.55% increase in revenues [3] - The next fiscal year forecasts earnings of $12.29 per share on $20.9 billion in revenues, indicating a year-over-year change of 13.03% in EPS and 6.96% in revenues [3] Valuation Metrics - The stock trades at a valuation of 33.9X current fiscal year EPS estimates, which is above the peer industry average of 23.9X, and at 34.5X on a trailing cash flow basis compared to the peer group's average of 12.2X [7] - The PEG ratio stands at 2.55, suggesting that the company is not positioned among the top value stocks [7] Zacks Rank and Style Scores - Trane Technologies holds a Zacks Rank of 2 (Buy) due to rising earnings estimates, aligning with the recommendation for investors to select stocks with a Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B [8] - The company has a Value Score of D, while its Growth and Momentum Scores are both B, resulting in a combined VGM Score of B [6] Industry Context - The Technology Services industry is performing well, ranking in the top 24% of all industries, indicating favorable conditions for both Trane Technologies and its peer, CoreCard Corporation [11] - CoreCard Corporation, a peer, has also shown strong performance with a Zacks Rank of 2 (Buy) and has reported a significant earnings beat of 114.29% in the last quarter [10]

Group 1 - Trane Technologies (TT) closed at $359.67, with a +1.51% change, outperforming the S&P 500's daily gain of 0.75% [1] - The stock has increased by 2.48% over the past month, underperforming the Business Services sector's gain of 5.97% and the S&P 500's gain of 4.03% [1] Group 2 - The upcoming EPS for Trane Technologies is projected at $3.22, indicating a 15.41% increase year-over-year [2] - The Zacks Consensus Estimate for revenue is $5.29 billion, reflecting an 8.42% increase from the previous year [2] Group 3 - For the full year, analysts expect earnings of $10.87 per share and revenue of $19.54 billion, representing changes of +20.24% and +10.55% respectively from last year [3] Group 4 - Recent revisions to analyst forecasts for Trane Technologies are important as they reflect short-term business trends, with positive revisions indicating analyst optimism [4] Group 5 - Estimate revisions are correlated with near-term share price momentum, and investors can utilize the Zacks Rank for actionable insights [5] Group 6 - Trane Technologies currently holds a Zacks Rank of 2 (Buy), with a Forward P/E ratio of 32.58, indicating a premium compared to the industry's Forward P/E of 23.01 [6] Group 7 - The company has a PEG ratio of 2.45, higher than the Technology Services industry's average PEG ratio of 1.45 [7] - The Technology Services industry is part of the Business Services sector, which holds a Zacks Industry Rank of 77, placing it in the top 31% of all industries [7]

Trane Technologies (TT) has performed well over the past year and has the potential to sustain momentum in the near term. Hence, if you have not taken advantage of the share price appreciation yet, it is time for you to add the stock to your portfolio. What Makes TT an Attractive Pick? An Outperformer: A glimpse at the company's price trend reveals that the stock has had an impressive run over the year. Shares of Trane Technologies have surged 67.9% compared with the 45.3% rally of the industry it belongs t ...

Core Viewpoint - Trane Technologies has demonstrated strong performance with a 14% increase in stock price since March 2024, outperforming the S&P 500, driven by robust commercial HVAC growth and a favorable outlook for the residential business as interest rates are expected to decline in FY25 [1][6]. Backlog and Growth - The company achieved a record backlog of $7.5 billion, reflecting a 19% organic growth during the quarter, which is expected to support growth through FY24 and FY25 [2][13]. - Trane Technologies has invested in high-growth verticals such as data centers and semiconductor fabs, leading to growth across all 14 tracked verticals in the commercial HVAC market [3]. Revenue and Booking Growth - The applied HVAC business has seen a 90% growth over three years, with management estimating it can generate 8-10 times more revenue over its lifetime [3]. - New product launches, including a residential HVAC and heat pump portfolio, are anticipated to drive demand and improve gross margins [3]. Residential Business Performance - Despite challenges in the U.S. residential market due to high interest rates, Trane Technologies expects mid-single-digit revenue growth for the full year, benefiting from moderating channel inventories and a strong start to the cooling season [5][4]. Financial Outlook - The company raised its FY24 revenue and EPS guidance, projecting organic revenue growth of approximately 10% and adjusted EPS of $10.80 to $10.50, reflecting strong first-half performance [7]. - Trane Technologies anticipates a 12% annual revenue growth rate, with a 40 basis points annual margin expansion driven by pricing increases and operational efficiencies [8]. Market Position and Projections - The U.S. HVAC market is projected to grow at a CAGR of 7.4% from 2024 to 2030, with Trane Technologies expected to outpace this growth due to its applied technology and pricing power [7]. - The company plans to allocate 4% of total revenue towards acquisitions, contributing an additional 2% to overall topline growth [8]. Valuation - A DCF model estimates a one-year target price of $380 per share, based on a cost of equity of 12% and projected free cash flow from equity [10].

It has been about a month since the last earnings report for Trane Technologies (TT) . Shares have added about 6.5% in that time frame, outperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is Trane Technologies due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. Trane Technologies Q2 Earnings B ...

Core Viewpoint - Trane Technologies (TT) has been upgraded to a Zacks Rank 1 (Strong 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 emphasizes the importance of earnings estimate revisions, which have a strong correlation 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 - For the fiscal year ending December 2024, Trane Technologies is expected to earn $10.82 per share, reflecting a 19.7% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Trane Technologies has risen by 3.4%, 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 Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 5% of Zacks-covered stocks receive a 'Strong Buy' rating, highlighting their superior earnings estimate revision features [9][10].

Financial Performance - Organic bookings increased by 19% and organic revenues increased by 13%[7] - Adjusted operating margins increased by 140 basis points and adjusted EPS increased by 23%[7] - The company is raising its 2024 organic revenue growth expectation to approximately +10%, up from the previous guidance of +8% to +9%[7] - The company is raising its 2024 adjusted EPS guidance to approximately $1080, up approximately +20% from the previous guidance of $1040 to $1050[7] - Q2 net revenue +13% organic to $4705 million[11] - Q2 Adj EBITDA margin +140 bps to 197%[11] - Q2 Adj Operating Margin +140 bps to 194%[11] - Q2 Adj Continuing EPS +23% to $268[11] Bookings and Backlog - Record high enterprise bookings of $53 billion, up approximately $300 million from the prior record high set in Q1 2024[7] - Q2 ending backlog of $75 billion, up 8% from $69 billion at the end of 2023[7] Segment Performance - Americas CHVAC bookings increased by more than 20% year-over-year[7] - Americas equipment and services revenues increased by >30% and + high-teens, respectively[9] - EMEA CHVAC bookings increased by +20%[9] - ACT lowered their 2024 transport market forecast to down ~15% vs down ~10% prior[20] Capital Allocation - The company expects to deploy approximately $25 billion in capital in 2024[38] - Q2 dividends totaled $190 million, and year-to-date dividends totaled $379 million[38] - Year-to-date share repurchases totaled $650 million, with approximately $18 billion remaining authorized[38]

Trane Technologies plc (TT) reported better-than-expected second-quarter 2024 results. Adjusted EPS of $3.3 surpassed the Zacks Consensus Estimate by 7.1% and increased 23.1% year over year. Revenues of $5.3 billion beat the consensus mark by 3.8% and increased 13% year over year on a reported basis, as well as organically. Bookings were up 19% year over year on a reported basis, as well as organically. Revenues and Bookings The Americas segment's revenues of $4.3 billion were higher than our estimate of $4 ...

Financial Performance - Net revenues for Q2 2024 increased to $5,307.4 million, up 12.8% from $4,704.7 million in Q2 2023[6] - Operating income for Q2 2024 rose to $1,034.2 million, a 16.8% increase from $885.4 million in Q2 2023[6] - Net earnings attributable to Trane Technologies plc for Q2 2024 were $755.3 million, up 28.8% from $586.2 million in Q2 2023[6] - Diluted earnings per share for Q2 2024 increased to $3.30, up 29.4% from $2.55 in Q2 2023[6] - Comprehensive income attributable to Trane Technologies plc for Q2 2024 was $723.2 million, up 33.4% from $542.1 million in Q2 2023[7] - Net earnings for the first half of 2024 reached $1,199.7 million, a significant increase from $901.8 million in 2023[16] - Net revenues for the six months ended June 30, 2024 were $9,523.0 million, up 13.8% from $8,370.6 million in the same period of 2023[51] - Total Segment Adjusted EBITDA for the six months ended June 30, 2024 was $1,979.1 million, a 23.4% increase from $1,603.2 million in 2023[66] - Earnings before income taxes for the six months ended June 30, 2024 were $1,523.3 million, a 31.7% increase from $1,156.2 million in 2023[67] - Gross profit margin improved by 280 basis points to 36.5% in Q2 2024, primarily due to gross productivity and price realization, partially offset by inflation[94] - Selling and administrative expenses increased by 28.9% to $901.3 million in Q2 2024, driven by higher human capital costs, sales commissions, and business reinvestment[95] - Operating income rose by 16.8% to $1.034 billion in Q2 2024, with operating margin increasing to 19.5% from 18.8% in Q2 2023[91] - Interest expense decreased by 6.7% to $57.5 million in Q2 2024 due to lower average balances of commercial paper outstanding[96] - Effective tax rate for Q2 2024 was 21.2%, consistent with the U.S. statutory rate, compared to 22.1% in Q2 2023[97] - Gross profit margin for the six months ended June 30, 2024 increased by 300 basis points to 35.6%, primarily due to gross productivity and price realization[107] - Selling and administrative expenses increased by 24.7% to $1,727.4 million, driven by higher human capital costs and business reinvestment[107] - Net cash provided by continuing operating activities for the six months ended June 30, 2024 was $958.6 million, a significant increase from $548.1 million in the same period in 2023, primarily due to higher net earnings and an improved cash conversion cycle[125] - Free cash flow for the six months ended June 30, 2024 was $810.1 million, compared to $426.9 million in the same period in 2023[130] Balance Sheet and Cash Flow - Total assets as of June 30, 2024, were $20,199.2 million, compared to $19,391.9 million as of December 31, 2023[10] - Cash and cash equivalents decreased to $874.6 million as of June 30, 2024, from $1,095.3 million as of December 31, 2023[10] - Accounts and notes receivable increased to $3,433.3 million as of June 30, 2024, from $2,956.8 million as of December 31, 2023[10] - Long-term debt increased to $4,316.2 million as of June 30, 2024, from $3,977.9 million as of December 31, 2023[10] - Total equity increased to $6,967.6 million as of June 30, 2024, compared to $6,277.2 million in the same period last year[12][13] - Net cash provided by operating activities increased to $943.1 million in the first half of 2024, compared to $532.5 million in 2023[16] - Net cash used in investing activities for the six months ended June 30, 2024 was $626.6 million, driven by $450.0 million in purchases of short-term investments and $156.7 million in capital expenditures[127] - Net cash used in financing activities for the six months ended June 30, 2024 was $504.3 million, primarily due to $624.4 million in share repurchases and $379.4 million in dividends paid, partially offset by $498.5 million from the issuance of Senior Notes[128] - Net earnings provided $1,457.5 million in cash from continuing operating activities for the six months ended June 30, 2024, after adjusting for non-cash transactions[125] - The company issued 5.100% Senior Notes due 2034, raising $498.5 million, which was used to purchase $450.0 million in short-term investments[128] - Capital expenditures for the six months ended June 30, 2024 were $156.7 million, compared to $134.0 million in the same period in 2023[127] - The company repurchased $624.4 million in ordinary shares during the six months ended June 30, 2024, compared to $300.0 million in the same period in 2023[128] - Dividends paid to ordinary shareholders for the six months ended June 30, 2024 were $379.4 million, compared to $341.4 million in the same period in 2023[128] - Total debt increased to $5,268.2 million as of June 30, 2024, with a debt-to-total capital ratio of 43.1%[121] - The company had $874.6 million in cash and cash equivalents as of June 30, 2024, with $668.1 million held by non-U.S. subsidiaries[117] Regional Performance - Americas region accounted for $7,625.8 million of net revenues in the six months ended June 30, 2024, up 16.4% year-over-year[51] - EMEA region net revenues were $1,198.7 million for the six months ended June 30, 2024, a 6.2% increase from the prior year period[51] - Asia Pacific net revenues declined 1.5% to $698.5 million in the six months ended June 30, 2024 compared to the same period in 2023[51] - Americas segment net revenues increased by 16.2% to $4,290.9 million, driven by higher volumes and price realization in Commercial and Residential HVAC businesses[100][101] - EMEA segment net revenues grew by 4.5% to $645.3 million, primarily due to higher volumes and price increases in Commercial HVAC and transport refrigeration businesses[100][103] - Asia Pacific segment net revenues decreased by 5.9% to $371.2 million, mainly due to lower volumes, partially offset by price increases in Commercial HVAC[100][104] - Americas Segment Adjusted EBITDA margin increased by 140 basis points to 22.8%, driven by price realization and higher volumes[101] - EMEA Segment Adjusted EBITDA margin increased by 120 basis points to 20.3%, primarily due to favorable productivity and price[103] - Asia Pacific Segment Adjusted EBITDA margin increased by 360 basis points to 25.5%, driven by gross productivity and price realization[104] - Americas net revenues increased by 16.4% to $7,625.8 million in 2024 compared to $6,553.5 million in 2023, driven by strong demand in Commercial and Residential HVAC businesses[111][113] - EMEA net revenues grew by 6.2% to $1,198.7 million in 2024, with organic revenue growth driven by strong customer demand in Commercial HVAC and transport refrigeration businesses[111][114] - Asia Pacific net revenues increased by 1.4% to $698.5 million in 2024, with organic revenue growth of 5.2% driven by increased customer demand and price realization in Commercial HVAC[111][116] - Americas Segment Adjusted EBITDA margin increased by 180 basis points to 20.8% in 2024, primarily due to price realization, gross productivity, and higher volumes[113] - EMEA Segment Adjusted EBITDA margin increased by 40 basis points to 19.2% in 2024, driven by favorable productivity, volume, and price[114] - Asia Pacific Segment Adjusted EBITDA margin increased by 280 basis points to 23.7% in 2024, primarily due to gross productivity, higher volumes, and price realization[116] Share Repurchases and Dividends - The company repurchased $624.4 million worth of ordinary shares in the first half of 2024, up from $300.0 million in the same period last year[16] - Dividends paid to ordinary shareholders totaled $379.4 million in the first half of 2024, compared to $341.4 million in 2023[16] - Share repurchases under the 2022 Authorization during six months ended June 30, 2024: $624 million[47] - Remaining share repurchase authorization as of June 30, 2024: $1.9 billion[47] - Additional share repurchases in July 2024 under the 2022 Authorization: $107 million[47] - Dividends declared per ordinary share for the six months ended June 30, 2024 were $2.52, compared to $2.25 for the same period in 2023[63] Debt and Financing - The company issued $500 million in 5.100% Senior Notes due 2034 in June 2024, with proceeds used to repay maturing debt and for general corporate purposes[31] - The fair value of the company's debt instruments increased to $5.1 billion as of June 30, 2024, from $4.7 billion at December 31, 2023[33] - Outstanding invoices under supplier financing arrangements increased to $264.9 million as of June 30, 2024, from $246.0 million at December 31, 2023[34] - The company maintains two $1.0 billion senior unsecured revolving credit facilities, with total commitments of $2.0 billion unused as of June 30, 2024 and December 31, 2023[32] - The company issued $500 million aggregate principal amount of 5.100% Senior Notes due 2034[31] - Total long-term debt, excluding current maturities, was $4,316.2 million as of June 30, 2024, compared to $3,977.9 million as of December 31, 2023[29] Pension and Benefits - Net periodic pension benefit cost for six months ended June 30, 2024: $22.7 million[43] - Company contributions to defined benefit pension plans for six months ended June 30, 2024: $19.3 million[44] - Projected contributions to enterprise pension plans worldwide for 2024: Approximately $59 million[44] - Net periodic postretirement benefit cost for the three months ended June 30, 2024 was $0, compared to $0.6 million in 2023, and for the six months ended June 30, 2024, it was $0, compared to $1.2 million in 2023[45] Litigation and Contingencies - The company is involved in various litigation, claims, and administrative proceedings, including asbestos-related lawsuits, but management believes any liability would not have a material adverse effect on the financial condition[68][69] - Aldrich and Murray filed for Chapter 11 bankruptcy on June 18, 2020, with $41.7 million of cash derecognized and an aggregate equity investment of $53.6 million recorded[71] - The company recognized a liability of $248.8 million related to asbestos liabilities and insurance assets upon deconsolidation in 2020[71] - Aldrich and Murray agreed to fund a trust with $545.0 million ($540.0 million in cash and a $5.0 million promissory note) to resolve asbestos claims[73] - The company recorded a charge of $21.2 million to increase its Funding Agreement liability to $270.0 million in 2021[73] - An operating cash outflow of $270.0 million occurred in 2022, with $91.8 million allocated to continuing operations and $178.2 million to discontinued operations[73] - Environmental reserves as of June 30, 2024, were $47.0 million, with $38.8 million related to investigation and remediation of former business sites[75] - Standard product warranty liability increased to $390.4 million as of June 30, 2024, with current reserves at $168.9 million[77] - Extended warranty liability increased to $384.8 million as of June 30, 2024, with current reserves at $131.6 million[78] Innovation and Sustainability - The company aims to reduce customers' carbon emissions by a billion metric tons by 2030 as part of its Gigaton Challenge, with net-zero targets validated by the Science Based Targets Initiative (SBTi)[82] - The company continues to invest in innovation and new product development to drive future growth, leveraging its global brand strength and diversified portfolio[87] Other Financial Metrics - Weighted-average diluted shares outstanding for Q2 2024 were 228.7 million, down from 230.3 million in Q2 2023[6] - Total unrecognized tax benefits for June 30, 2024 and December 31, 2023 were $83.5 million and $84.9 million, respectively[62] - The weighted-average number of basic shares outstanding for the six months ended June 30, 2024 was 227.0 million, with 2.1 million shares issuable under incentive share plans[63] - The company's effective income tax rate for the six months ended June 30, 2024 was 20.4%, lower than the U.S. statutory rate of 21.0% due to excess tax benefits from employee share-based payments and earnings in non-U.S. jurisdictions[62] - Share-based compensation expense was $44.2 million pre-tax for the six months ended June 30, 2024, up from $41.9 million in the prior year period[54] - The company granted 249,579 stock options and 98,948 RSUs during the six months ended June 30, 2024[55] - Other income/(expense), net was $(29.2) million for the six months ended June 30, 2024, compared to $(66.8) million in the prior year period[61]