Trane Technologies: Anticipated Earnings Growth Sparks Investor Interest
Swords, Ireland-based Trane Technologies plc (TT) specializes in designing, manufacturing, selling, and servicing climate control products for heating, ventilation, air conditioning, and transport solutions. With a market capitalization of $87.6 billion, Trane employs over 40,000 people and operates in various regions, including the Americas, Indo-Pacific, and EMEA.
Upcoming Fourth-Quarter Results
The HVAC leader is set to release its fourth-quarter earnings before the market opens on Thursday, Jan. 30. Analysts anticipate a non-GAAP profit of $2.53 per share, representing a 16.6% increase from the $2.17 per share reported in the same quarter last year. Notably, Trane has exceeded Wall Street’s bottom-line expectations in each of the past four quarters. Its adjusted EPS for the most recent quarter climbed 20.8% year-over-year to $3.37, surpassing analysts’ predictions by 4.3%.
Fiscal Year Forecasts Show Strong Growth
Looking ahead to fiscal 2024, Trane is projected to achieve an adjusted EPS of $11.15, a notable 23.3% increase from $9.04 in fiscal 2023. Expectations for fiscal 2025 remain optimistic, with earnings anticipated to rise 14.3% year-over-year to $12.74 per share.
Stock Performance Outshines Market Peers
Over the past year, TT stock has risen 59.2%, significantly outperforming the S&P 500 Index, which gained 26.5%, and the Industrial Select Sector SPDR Fund, which saw a 25% increase during the same period.
Q3 Performance: Mixed Results Spark Caution
Trane’s overall net revenues for Q3 surged 11.4% year-over-year to $5.4 billion, beating analysts’ expectations by 2.4%. This growth was primarily driven by strong HVAC sales in the Americas, which benefited from favorable pricing that improved margins and resulted in an 18.6% rise in operating income, exceeding $1 billion.
However, following the Q3 report released on Oct. 30, Trane’s stock fell by 3.9%. This decrease was largely attributed to a 20.7% decline in sales in the Indo-Pacific region, which totaled $298.5 million. Weakness in the non-residential market and strict credit policies affected order fulfillments, particularly in China.
Analysts Maintain Positive Outlook
The consensus rating for TT stock is moderately bullish, with a “Moderate Buy” classification. Of the 20 analysts covering Trane, seven recommend “Strong Buy,” 12 suggest “Hold,” and one gives a “Strong Sell” rating. The average price target stands at $428.17, indicating a potential upside of 10% from current levels.
On the date of publication, Aditya Sarawgi did not hold (either directly or indirectly) any positions in the securities mentioned in this article. All information and data in this article are for informational purposes only. For further information, please consult the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
