Trane Technologies currently trades at $434.41 and has been a dream stock for shareholders. It’s returned 326% since July 2020, more than tripling the S&P 500’s 93.9% gain. The company has also beaten the index over the past six months as its stock price is up 11.7% thanks to its solid quarterly results.
Following the strength, is TT a buy right now? Or is the market overestimating its value? Find out in our full research report, it’s free.
Why Are We Positive On Trane Technologies?
With low-pressure heating systems as its first product, Trane (NYSE: TT) designs, manufactures, and sells HVAC and refrigeration systems, the former to commercial and residential building customers and the latter to commercial truck manufacturers.
1. Long-Term Revenue Growth Shows Strong Momentum
Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Trane Technologies grew its sales at a solid 9.5% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers. 
2. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Trane Technologies’s EPS grew at a spectacular 17.2% compounded annual growth rate over the last five years, higher than its 9.5% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
3. Stellar ROIC Showcases Lucrative Growth Opportunities
Growth gives us insight into a company’s long-term potential, but how capital-efficient was that growth? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).
Trane Technologies’s five-year average ROIC was 22.9%, placing it among the best industrials companies. This illustrates its management team’s ability to invest in highly profitable ventures and produce tangible results for shareholders.
Final Judgment
These are just a few reasons why we're bullish on Trane Technologies, and with its shares beating the market recently, the stock trades at 33.4× forward P/E (or $434.41 per share). Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
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