TT Stock Forecast & Price Target

Trane Technologies is projecting total reported sales growth of approximately 10% for the upcoming fiscal year, driven by strong performance in residential HVAC, where bookings increased over 30% and revenues rose in the low teens. The company's EBITDA margin has experienced significant growth, with a year-over-year increase of 360 basis points to reach 25.5%, largely attributed to robust volume growth and effective pricing strategies that have successfully mitigated inflationary pressures. Additionally, Trane's positive outlook is further underscored by anticipated organic sales growth of 8.5% for the third quarter of FY24, surpassing both internal estimates and broader consensus expectations.

Trane Technologies is facing a challenging outlook due to anticipated contractions in its Americas transport segment, with market forecasts predicting a decline exceeding 25% in the latter half of 2024. The company has revised its full-year organic growth expectations for this segment from -10% to -15%, following a significant decline in the first half of 2024 and continued downward trends expected in the second half. Given its operations in cyclical industrial markets, any slowdown in global activity is likely to pressure sales and compress operating margins, potentially lowering earnings per share to approximately $11.30 by 2025.