Trane Technologies plc TT
Trane Technologies remains one of the highest-quality compounders in industrials — revenue has grown from $14.14B in FY2021 to $21.32B in FY2025 with diluted EPS nearly doubling from $5.87 to $12.98, and Q2 2026 delivered 39% bookings growth to $7.82B (37% organic), 11% revenue growth to $6.35B, adjusted EPS of $4.31 and a raised full-year outlook. The operating story is accelerating, not fading, and the balance sheet is improving (total debt down to $4.62B from $5.39B, FY2025 free cash flow of $2.81B).
What has changed is price: shares at $480.20 are up roughly 9% from the $440 oversold 200-day test that underpinned the prior buy, and the stock now trades at 36.2x earnings and 25.1x EV/EBITDA — a 24% and 38% premium to the peer medians of 29.1x and 18.2x. With the entry-point asymmetry spent, the CEO monetizing 43,778 shares at $475, and the multiple carrying most of the data-center-cooling optionality, the risk/reward is balanced rather than compelling.
What could go wrong
- Premium multiple leaves no error margin. At 36.2x P/E and 25.1x EV/EBITDA versus peer medians of 29.1x and 18.2x, even a modest bookings or margin miss can drive de-rating well beyond the earnings shortfall.
- Bookings comp is unrepeatable. Q2 2026 bookings of $7.82B against $5.63B a year ago (+39%) sets an extremely high base; a normalization toward revenue growth (~9-11% organic) could be read as deceleration even if the backlog stays healthy.
- Insider distribution. Net insider activity over 24 months is -8,447 shares and -$59.0M on 125 transactions, including the Chair/CEO's $20.8M sale at $475 on 2026-08-05; no cluster buying is present to offset it.
- Construction/residential cyclicality. Growth depends on commercial HVAC, services and residential end markets; a construction slowdown would hit a business already valued for above-peer growth persistence.
What would change my mind
Where this comes from: technicals as_of 2026-08-14 · peer_relative composite · FMP annual fundamentals FY2025/FY2024 · FMP annual fundamentals FY2021-FY2025. Orin's read on TT; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All TT filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $7.1B | 0.2% of fund |
| Jpmorgan Chase & | $6.0B | 0.3% of fund |
| Fmr | $5.0B | 0.2% of fund |
| State Street | $4.9B | 0.1% of fund |
| Morgan Stanley | $2.7B | 0.1% of fund |
| Geode Capital Management | $2.5B | 0.1% of fund |
110 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 125 Form 4 filings, net −$59.0M. Of the 50 on hand, 0 were open-market purchases and 12 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about TT
Orin answers questions about TT from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 33.0× | 29.8× | 44.5× |
| EV/EBITDA | 22.9× | 21.6× | — |
| P/S | 4.33× | 3.41× | — |
| P/B | 11.3× | 7.9× | — |
Its P/E sits 80th percentile of its own last 5 years (+0.94σ from its own mean).
15.0%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $2.8B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$547
$475 – $585 · +27% against today's price
- 12 buy or overweight
- 14 hold
- 1 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| TTTrane Technologies plc | $96B | 33.0× | 22.9× | 35.4% | 13.3% | 34% |
| ADPAutomatic Data Processing, Inc. | $105B | 24.0× | 16.8× | 48.2% | 20.1% | 70% |
| CARRCarrier Global Corporation | $45B | 37.9× | 20.6× | 24.3% | 5.5% | 9% |
| EMREmerson Electric Co. | $87B | 33.7× | 19.1× | 53.2% | 13.8% | 13% |
| GDGeneral Dynamics Corporation | $93B | 20.6× | 15.2× | 15.4% | 8.2% | 17% |
| JCIJohnson Controls International plc | $88B | 25.3× | 27.0× | 36.7% | 14.3% | 27% |
| LMTLockheed Martin Corporation | $121B | 19.3× | 14.0× | 11.8% | 8.2% | 86% |
| MMM3M Company | $88B | 30.1× | 17.9× | 39.4% | 11.9% | 77% |
| NOCNorthrop Grumman Corporation | $73B | 16.3× | 11.7× | 20.1% | 10.5% | 27% |
| PHParker-Hannifin Corporation | $122B | 33.6× | 22.5× | 37.7% | 17.0% | 25% |
| WMWaste Management, Inc. | $83B | 29.3× | 14.1× | 35.0% | 11.1% | 29% |
The median is of the 10 peers listed above and nothing else — check it against the column. This company trades 20.8% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.