Trane Technologies plc

TT
Financial Analysis · Updated May 13, 2026 · Coverage 2026-Q2
TTM ROIC
30%
FY25 · NOPAT / Invested Capital (implied) · WACC ~9% · Moat spread +21pp

Financial Snapshot

ticker: TT step: 04 generated: 2026-05-13 source: quick-research

Trane Technologies plc (TT) — Financial Snapshot

Income Statement Summary

Metric FY2022 FY2023 FY2024 YoY
Revenue $15.99B $17.68B $19.84B +12.2%
Gross Margin ~32% ~34% ~36%
Operating Margin ~14% ~16% ~17.5%
Net Income ~$1.6B ~$2.0B ~$2.6B +26.9%
EPS (adjusted) ~$7.50 ~$9.40 ~$11.25 +19.7%

Consistent double-digit revenue growth 2022-2024 driven by commercial HVAC pricing power, data center demand surge, and services growth. Margin expansion of ~550bp since 2020 reflects mix shift toward higher-margin applied commercial systems and growing services. FY2025: revenue ~$21.3B (+7.5%); adj. EPS $13.06 (+16.4%). EPS has nearly doubled since 2020.

Cash Flow & Balance Sheet (FY2025)

Metric Value
Free Cash Flow (FY2025) ~$2.81B
Operating Cash Flow ~$3.3B
Capital Expenditures ~$500M
Cash & Equivalents ~$2.0B
Total Debt ~$6.5B
FCF Conversion ~100% of adjusted net earnings (consistently)
Backlog (year-end 2025) $7.8B

Key Ratios (approximate)

  • P/E: ~34x (adjusted FY2026 guidance) | EV/EBITDA: ~25x | FCF Yield: ~2%
  • Revenue Growth (FY2024): +12.2% | Revenue Growth (FY2025): +7.5%
  • Gross Margin: ~36% | Adj. Operating Margin: ~19-20%
  • Net Debt / EBITDA: ~1.5x — conservative leverage

Growth Profile

Trane has compounded revenue at ~12% and EPS at ~18% annually since 2020, driven by commercial HVAC pricing (8-10% annual price increases on equipment), data center demand (Americas commercial applied bookings +120%+ for two consecutive quarters in 2025), and services mix shift. The $7.8B backlog at year-end 2025 with a 2:1 book-to-bill ratio in data center-related segments provides exceptional revenue visibility into 2026-2027. FCF conversion of ~100% of adj. net earnings is a key quality metric — no earnings quality concerns.

Forward Estimates

  • FY2026 guidance: Revenue +8.5-9.5%; adj. EPS $14.65-14.85 (+12-14% YoY)
  • Consensus FY2026 adj. EPS: ~$14.82 | FY2027: ~$16.82
  • FCF FY2026 consensus: ~$3.28B
  • Analyst consensus: 9 Buy/Outperform, 12 Hold, 2 Sell (21 analysts); mean target ~$477
  • Dividend: ~$3.60/share annually; 10%+ annual increases since 2020

Deeper Financial Analysis

The fundamental tier adds 9 additional research dimensions for $TT.

Revenue Breakdown
Segment revenue, geographic mix, product-line contribution margins, and cohort dynamics.
Financial Trends
Quarter-over-quarter momentum, leading indicators, and inflection point analysis.
Balance Sheet
Debt structure, liquidity runway, dilution risk, and working capital dynamics.
Capital Allocation
Buyback cadence, M&A appetite, dividend policy, and reinvestment priorities.
Returns on Capital (ROIC)
Multi-year ROIC vs. WACC, marginal returns on reinvestment, sales-to-invested-capital efficiency, and moat spread.
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Markdown: /stocks/tt/financials/md · → thesis · → memo