TT Stock Forecast & Price Target

Trane Technologies has demonstrated strong growth in orders for commercial HVAC applied equipment, with increases of 60% in Q2 2025 and an impressive 120% over a two-year period, indicating robust demand that should enhance its aftermarket revenue potential significantly. The company's adjusted operating margin expanded by 90 basis points year-over-year to reach 20.3%, surpassing both internal estimates and consensus expectations, primarily driven by a 130 basis point improvement in the Americas segment. Furthermore, organic growth in the Americas region was solid at 9%, aligning with market forecasts and showcasing the firm's operational strength within its key market.

Trane Technologies faces a challenging outlook due to a downward revision in its revenue expectations, specifically forecasting flat growth in the Americas Residential segment for 2025, a stark decline from earlier projections of mid to high single-digit growth. This negative adjustment is attributed to a combination of a canister shortage and elevated inventory levels in distribution channels, which have impacted overall demand. Additionally, the broader market sentiment is affected by persistent weaknesses in new home construction and existing home sales, further compounding the company's sales challenges in the residential HVAC sector.