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Trane (TT) Gains From Global HVAC Demand Amid High Competition

Trane Technologies TT has had an impressive run over the past six months, wherein the company’s shares have gained 51.7%, outperforming the 25.9% rally of the industry it belongs to and the 16.6% rise of the Zacks S&P 500 composite.

TT reported better-than-expected first-quarter 2024 results. The adjusted EPS of $1.94 surpassed the Zacks Consensus Estimate by 18.3% and increased 37.6% year over year. Revenues of $4.2 billion beat the consensus mark by 5.7% and increased 15% year over year on a reported basis and 14% organically. Bookings were up 18% year over year on a reported basis and 17% organically.

Trane Technologies plc Revenue (TTM)

 

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Trane Technologies plc revenue-ttm | Trane Technologies plc Quote

How Is TT Doing?

Trane has been focused on enhancing its business operating system, and innovating through business transformation initiatives and investments. In 2023, it exceeded its goal of $300 million in annualized savings.

The rise in global demand for commercial HVAC is aiding the top line of the company. Strong positive price realization, growth in volume and productivity are benefitting Trane’s bottom line.

The company has a consistent record of rewarding its shareholders through dividend payments and share repurchases. In 2023, 2022, 2021 and 2020, it repurchased shares worth $669.3 million, $1.2 billion, $1.1 billion and $250 million, respectively. It paid out $683.7 million, $620 million, $561.1 million and $507.3 million in dividends in 2023, 2022, 2021 and 2020, respectively. Such moves not only instill investor confidence but also positively impact the bottom line.

Diversity in products and services puts Trane to face a variety of competitors. Its competitors include regional, and larger U.S. and non-U.S. companies that differ by product lines and services. The company deals with fierce competition in terms of price, quantity, delivery, service, support, technology and innovation. It has been a hassle for TT to manage price pressure, and acquire and retain customers amid rising competition.

Zacks Rank & Stocks to Consider

Trane Technologies currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Business Services sector are AppLovin APP and Western Union WU.

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

APP has a long-term earnings growth expectation of 20%. It delivered a trailing four-quarter earnings surprise of 60.9%, on average.

Western Union currently sports a Zacks Rank of 1. It has a long-term earnings growth expectation of 3.9%.

WU delivered a trailing four-quarter earnings surprise of 15.7%, on average.

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Trane Technologies plc (TT) : Free Stock Analysis Report

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