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Trane Technologies Stock Rises 11% in a Year: What You Should Know

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Trane Technologiesplc (TT - Free Report) stock has had an impressive run over the past year. TT shares have appreciated 11.3%, outperforming the 10.8% growth of the industry.

What’s Driving TT Stock?

The company reported better-than-expected earnings and revenue performance in the past four quarters, benefiting from a strong demand situation, especially in commercial HVAC globally, acquisitions, positive price realization, volume growth and productivity. In the fourth quarter of 2024, TT’s adjusted EPS increased 20.3% year over year. Revenues rose 10.2% year over year.

Trane Technologies is seasonally balanced. Demand for air conditioning systems and services is low during autumn and winter, which is why, in the fourth quarter of 2023 and the first quarter of 2024, revenues declined quarter-over-quarter by 9.4% and 4.7%, respectively. Similarly, when heating sales pick up during the second and third quarters, revenues rise, as evident from quarter-over-quarter gains of 25.9% and 2.5% in the second and third quarters of 2024, respectively, offsetting weakness in autumn and winter. Additionally, the holidays being in this season would typically increase transport solution sales, further offsetting the seasonality.

 

Commitment to shareholder returns makes TT reliable for investors to compound wealth over the long term. In 2022, 2023, and 2024, the company repurchased shares worth $1.2 billion, $669.3 million, and $1.3 billion, respectively. It paid $620.2 million, $683.7 million, and $757.5 million in dividends in 2022, 2023, and 2024, respectively.

Trane Technologies' current ratio (a measure of liquidity) in the fourth quarter of 2024 was 1.21, lower than the industry’s 1.27. However, the current ratio has increased from the year-ago quarter’s 1.14, mainly due to a rise in cash and equivalents. A current ratio of more than 1 might assist the company in paying off short-term debts efficiently.

Zacks Rank and Key Picks

TT carries a Zacks Rank #3 (Hold) at present.

Some better-ranked stocks are Limbach Holdings, Inc. (LMB - Free Report) and PagSeguro Digital (PAGS - Free Report) .

Limbach Holdings sports a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

LMB has a long-term earnings growth expectation of 12%. It delivered a trailing four-quarter earnings surprise of 42.3%, on average.

PagSeguro Digital flaunts a Zacks Rank of 1 at present.

PAGShas a long-term earnings growth expectation of 13.6%. It delivered a trailing four-quarter earnings surprise of 9.3% on average.


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