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Strong Demand in Commercial HVAC Market Benefits Trane Technologies

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Trane Technologies (TT - Free Report) has had an impressive run over the past year, wherein the company’s shares have gained 56.6%, outperforming the 49.4% rally of the industry it belongs to and the 29.1% rise of the Zacks S&P 500 composite.

One Year Price Performance

 

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TT reported better-than-expected third-quarter 2024 results. The adjusted EPS of $3.37 surpassed the Zacks Consensus Estimate by 4.3% and increased 20.8% year over year. Revenues of $5.4 billion beat the consensus mark by 2.4% and increased 11% year over year on a reported and organic basis. Bookings rose 5% year over year on a reported basis and organically.

How is Trane Technologies Doing?

Trane Technologies' top line is aided by the strong demand in the commercial heating, ventilation and air conditioning (HVAC) markets. Such strength is derived from the company’s differentiated customer-driven solutions, advantages of energy-efficient product installation and decarbonizing the built environment.

Supportive policies and regulations, mainly in the United States and the European region, drive the company’s performance. As a result, we are optimistic and expect TT’s net revenues to rise 11.1%, 6.1% and 6.2% in 2024, 2025 and 2026, respectively.

Business transformation initiatives and investments help the company focus on enhancing its business operating system. As a result, Trane Technologies outpaced the aim of $300 million in annualized savings in 2023.

The company has a consistent record of rewarding its shareholders via dividend payments and share repurchases. In 2020, 2021, 2022 and 2023, it repurchased shares worth $250, $ 1.1 billion, $1.2 billion and $669.3 million, respectively.

Trane Technologies paid out $507.3 million, $561.1 million, $620 million and $683.7 million in dividends in 2020, 2021, 2022 and 2023, respectively. Such actions point to the company’s commitment to boosting shareholder value, underlining its confidence in its business and driving its bottom line.

TT’s Zacks Rank & Other Stocks to Consider

Trane Technologies currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader Zacks Business Services sector are Climb Global Solutions, Inc. (CLMB - Free Report) and Parsons (PSN - Free Report) .

Climb Global Solutions flaunts a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

CLMB has a long-term earnings growth expectation of 16%. It delivered a trailing four-quarter earnings surprise of 51.1%, on average.

Parsons sports a Zacks Rank of 1 at present. It has a long-term earnings growth expectation of 18.6%.

PSN delivered a trailing four-quarter earnings surprise of 17.5%, on average.


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