TRANE TECHNOLOGIES PLC (TT) Stock Fundamental Analysis
NYSE:TT - New York Stock Exchange, Inc. - IE00BK9ZQ967 - Common Stock - Currency: USD
Taking everything into account, TT scores 6 out of 10 in our fundamental rating. TT was compared to 42 industry peers in the Building Products industry. Both the health and profitability get an excellent rating, making TT a very profitable company, without any liquidiy or solvency issues. TT is valied quite expensively at the moment, while it does show a decent growth rate. This makes TT very considerable for quality investing!
1. Profitability
1.1 Basic Checks
TT had positive earnings in the past year.
TT had a positive operating cash flow in the past year.
Each year in the past 5 years TT has been profitable.
In the past 5 years TT always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 13.60%, TT is in the better half of the industry, outperforming 78.57% of the companies in the same industry.
Looking at the Return On Equity, with a value of 36.53%, TT belongs to the top of the industry, outperforming 88.10% of the companies in the same industry.
The Return On Invested Capital of TT (21.61%) is better than 90.48% of its industry peers.
TT had an Average Return On Invested Capital over the past 3 years of 17.76%. This is above the industry average of 12.98%.
The last Return On Invested Capital (21.61%) for TT is above the 3 year average (17.76%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.6% | ||
| ROE | 36.53% | ||
| ROIC | 21.61% |
ROA(3y)10.97%
ROA(5y)9.1%
ROE(3y)30.74%
ROE(5y)25.66%
ROIC(3y)17.76%
ROIC(5y)15.01%
1.3 Margins
TT has a better Profit Margin (13.47%) than 73.81% of its industry peers.
In the last couple of years the Profit Margin of TT has grown nicely.
TT has a better Operating Margin (18.14%) than 73.81% of its industry peers.
TT's Operating Margin has improved in the last couple of years.
TT's Gross Margin of 35.93% is in line compared to the rest of the industry. TT outperforms 54.76% of its industry peers.
In the last couple of years the Gross Margin of TT has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.14% | ||
| PM (TTM) | 13.47% | ||
| GM | 35.93% |
OM growth 3Y6.75%
OM growth 5Y6.01%
PM growth 3Y8.74%
PM growth 5Y3.71%
GM growth 3Y4.06%
GM growth 5Y2.99%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so TT is creating value.
The number of shares outstanding for TT has been reduced compared to 1 year ago.
TT has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, TT has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 6.88 indicates that TT is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 6.88, TT belongs to the top of the industry, outperforming 80.95% of the companies in the same industry.
The Debt to FCF ratio of TT is 1.68, which is an excellent value as it means it would take TT, only 1.68 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.68, TT is in the better half of the industry, outperforming 76.19% of the companies in the same industry.
A Debt/Equity ratio of 0.52 indicates that TT is somewhat dependend on debt financing.
The Debt to Equity ratio of TT (0.52) is comparable to the rest of the industry.
Even though the debt/equity ratio score it not favorable for TT, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 1.68 | ||
| Altman-Z | 6.88 |
ROIC/WACC2.88
WACC7.51%
2.3 Liquidity
TT has a Current Ratio of 1.09. This is a normal value and indicates that TT is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.09, TT is doing worse than 88.10% of the companies in the same industry.
A Quick Ratio of 0.74 indicates that TT may have some problems paying its short term obligations.
With a Quick ratio value of 0.74, TT is not doing good in the industry: 85.71% of the companies in the same industry are doing better.
The current and quick ratio evaluation for TT is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.74 |
3. Growth
3.1 Past
TT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 22.44%, which is quite impressive.
Measured over the past years, TT shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.99% on average per year.
TT shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 11.43%.
The Revenue has been growing by 8.69% on average over the past years. This is quite good.
EPS 1Y (TTM)22.44%
EPS 3Y22.59%
EPS 5Y11.99%
EPS Q2Q%26.29%
Revenue 1Y (TTM)11.43%
Revenue growth 3Y11.96%
Revenue growth 5Y8.69%
Sales Q2Q%11.22%
3.2 Future
TT is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.63% yearly.
TT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.65% yearly.
EPS Next Y18.52%
EPS Next 2Y15.18%
EPS Next 3Y13.87%
EPS Next 5Y8.63%
Revenue Next Year9.05%
Revenue Next 2Y8.08%
Revenue Next 3Y7.74%
Revenue Next 5Y6.65%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 36.85, TT can be considered very expensive at the moment.
TT's Price/Earnings ratio is a bit more expensive when compared to the industry. TT is more expensive than 73.81% of the companies in the same industry.
TT is valuated rather expensively when we compare the Price/Earnings ratio to 26.60, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 29.04 indicates a quite expensive valuation of TT.
69.05% of the companies in the same industry are cheaper than TT, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.43. TT is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.85 | ||
| Fwd PE | 29.04 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TT indicates a slightly more expensive valuation: TT is more expensive than 78.57% of the companies listed in the same industry.
61.90% of the companies in the same industry are cheaper than TT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.06 | ||
| EV/EBITDA | 24.52 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates TT does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of TT may justify a higher PE ratio.
A more expensive valuation may be justified as TT's earnings are expected to grow with 13.87% in the coming years.
PEG (NY)1.99
PEG (5Y)3.07
EPS Next 2Y15.18%
EPS Next 3Y13.87%
5. Dividend
5.1 Amount
With a yearly dividend of 0.89%, TT is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.16, TT pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.36, TT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
5.2 History
On average, the dividend of TT grows each year by 9.56%, which is quite nice.
TT has been paying a dividend for at least 10 years, so it has a reliable track record.
TT has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)9.56%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
28.43% of the earnings are spent on dividend by TT. This is a low number and sustainable payout ratio.
TT's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP28.43%
EPS Next 2Y15.18%
EPS Next 3Y13.87%
NYSE:TT (5/21/2025, 1:00:08 PM)
432.2
+2.4 (+0.56%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners88.3%
Inst Owner Change3.06%
Ins Owners0.3%
Ins Owner Change-0.25%
Market Cap96.46B
Analysts71.76
Price Target418.64 (-3.14%)
Short Float %1.92%
Short Ratio2.52
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
Yearly Dividend3.35
Dividend Growth(5Y)9.56%
DP28.43%
Div Incr Years14
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)3.61%
Min EPS beat(2)-0.28%
Max EPS beat(2)7.49%
EPS beat(4)3
Avg EPS beat(4)2.94%
Min EPS beat(4)-0.28%
Max EPS beat(4)7.49%
EPS beat(8)6
Avg EPS beat(8)3.42%
EPS beat(12)9
Avg EPS beat(12)3.42%
EPS beat(16)11
Avg EPS beat(16)2.78%
Revenue beat(2)1
Avg Revenue beat(2)0.25%
Min Revenue beat(2)-1.14%
Max Revenue beat(2)1.64%
Revenue beat(4)2
Avg Revenue beat(4)0.03%
Min Revenue beat(4)-1.14%
Max Revenue beat(4)1.64%
Revenue beat(8)3
Avg Revenue beat(8)-0.36%
Revenue beat(12)5
Avg Revenue beat(12)-0.27%
Revenue beat(16)6
Avg Revenue beat(16)-0.52%
PT rev (1m)0.48%
PT rev (3m)-4.5%
EPS NQ rev (1m)0.8%
EPS NQ rev (3m)0.47%
EPS NY rev (1m)1.3%
EPS NY rev (3m)0.8%
Revenue NQ rev (1m)1.25%
Revenue NQ rev (3m)1.23%
Revenue NY rev (1m)1.2%
Revenue NY rev (3m)1.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.85 | ||
| Fwd PE | 29.04 | ||
| P/S | 4.75 | ||
| P/FCF | 34.06 | ||
| P/OCF | 29.79 | ||
| P/B | 12.88 | ||
| P/tB | N/A | ||
| EV/EBITDA | 24.52 |
EPS(TTM)11.73
EY2.71%
EPS(NY)14.89
Fwd EY3.44%
FCF(TTM)12.69
FCFY2.94%
OCF(TTM)14.51
OCFY3.36%
SpS91.01
BVpS33.56
TBVpS-9.89
PEG (NY)1.99
PEG (5Y)3.07
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.6% | ||
| ROE | 36.53% | ||
| ROCE | 26.8% | ||
| ROIC | 21.61% | ||
| ROICexc | 23.05% | ||
| ROICexgc | 93.1% | ||
| OM | 18.14% | ||
| PM (TTM) | 13.47% | ||
| GM | 35.93% | ||
| FCFM | 13.94% |
ROA(3y)10.97%
ROA(5y)9.1%
ROE(3y)30.74%
ROE(5y)25.66%
ROIC(3y)17.76%
ROIC(5y)15.01%
ROICexc(3y)19.7%
ROICexc(5y)17.25%
ROICexgc(3y)86.55%
ROICexgc(5y)79.73%
ROCE(3y)22.03%
ROCE(5y)18.62%
ROICexcg growth 3Y9.37%
ROICexcg growth 5Y29.75%
ROICexc growth 3Y15.09%
ROICexc growth 5Y17.85%
OM growth 3Y6.75%
OM growth 5Y6.01%
PM growth 3Y8.74%
PM growth 5Y3.71%
GM growth 3Y4.06%
GM growth 5Y2.99%
F-Score8
Asset Turnover1.01
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 1.68 | ||
| Debt/EBITDA | 0.96 | ||
| Cap/Depr | 104.83% | ||
| Cap/Sales | 2% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 79.51% | ||
| Profit Quality | 103.5% | ||
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.74 | ||
| Altman-Z | 6.88 |
F-Score8
WACC7.51%
ROIC/WACC2.88
Cap/Depr(3y)91.41%
Cap/Depr(5y)79.68%
Cap/Sales(3y)1.8%
Cap/Sales(5y)1.63%
Profit Quality(3y)93.42%
Profit Quality(5y)105.39%
High Growth Momentum
Growth
EPS 1Y (TTM)22.44%
EPS 3Y22.59%
EPS 5Y11.99%
EPS Q2Q%26.29%
EPS Next Y18.52%
EPS Next 2Y15.18%
EPS Next 3Y13.87%
EPS Next 5Y8.63%
Revenue 1Y (TTM)11.43%
Revenue growth 3Y11.96%
Revenue growth 5Y8.69%
Sales Q2Q%11.22%
Revenue Next Year9.05%
Revenue Next 2Y8.08%
Revenue Next 3Y7.74%
Revenue Next 5Y6.65%
EBIT growth 1Y20%
EBIT growth 3Y19.52%
EBIT growth 5Y15.23%
EBIT Next Year23.47%
EBIT Next 3Y13.3%
EBIT Next 5Y7.68%
FCF growth 1Y101.35%
FCF growth 3Y26.67%
FCF growth 5Y10.75%
OCF growth 1Y90.39%
OCF growth 3Y25.58%
OCF growth 5Y10.38%