TT Stock Forecast & Price Target

Trane Technologies demonstrates strong growth potential, with a notable 60% increase in orders for CHVAC applied equipment during the second quarter of 2025, coupled with a significant 120% growth on a two-year stack, which suggests robust demand and a promising aftermarket revenue multiplier of 8x-10x post-warranty. The company also reported an impressive expansion in adjusted operating margin, which grew by 90 basis points year-over-year to 20.3%, surpassing consensus estimates by 50 basis points and indicating improved operational efficiency. Additionally, the Americas region exhibited solid organic growth of 9%, aligning with expectations and reinforcing the company's strong performance in a key market, making a compelling case for positive long-term outlook.

Trane Technologies has revised its sales outlook for the Americas Residential segment, now forecasting flat year-over-year performance instead of the previously expected moderate to high single-digit growth, reflecting negative market conditions. This shift is compounded by challenges such as a canister shortage and elevated channel inventory, which are expected to impact sales negatively through at least 2025. Additionally, the broader context of sluggish new home construction and existing home sales is weighing on investor sentiment, further contributing to a pessimistic outlook for Trane's stock.