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6 Reasons Why You Should Bet on Trane Technologies (TT) Stock

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Trane Technologies plc (TT - Free Report) is a technology services provider that has performed extremely well over the past year and has the potential to sustain the momentum in the near term. Consequently, if you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.

What Makes Trane an Attractive Pick?

An Outperformer: A glimpse of the company’s price trend reveals that the stock has had an impressive run on the bourse in the past year. Shares of Trane Technologieshave returned a whopping 101%, significantly outperforming the 12.7% growth of the industry it belongs to.

Solid Rank: Trane Technologies has a Zacks Rank #2 (Buy). Our research shows that stocks witha Zacks Rank #1 (Strong Buy) or #2 offer attractive investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.

Northward Estimate Revisions: The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Nine estimates for 2021 moved north over the past 60 days versus no southward revision, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for 2021 earnings has climbed 10.2%.

Positive Earnings Surprise History: Trane has an impressive earnings surprise history. The company outpaced the consensus mark in all of the trailing four quarters, delivering an average beat of 42%.

Trane Technologies plc Price, Consensus and EPS Surprise

Trane Technologies plc Price, Consensus and EPS Surprise

Trane Technologies plc price-consensus-eps-surprise-chart | Trane Technologies plc Quote

Strong Growth Prospects: The company’s Zacks Consensus Estimate for 2021 earnings of $6.04 reflects year-over-year growth of 35.4%. Moreover, earnings are expected to register 13.4% growth in 2022. The stock’s long-term expected earnings per share growth rate is 21.5%.

Growth Factors: Trane Technologies continues to pursue its broader growth objectives through focusing on steps to increase revenue stream from parts, services, controls, used equipment and rentals. Also, the company remains focused on improving quality of its products and services, and operating efficiencies, so as to achieve sustained improvement in earnings and cash flow.

The company prioritizes improving its business operating system and innovation through transformation initiatives and investments. With a view to lower its cost structure, Trane Technologies targets $100 million in annualized cost savings for 2021 and $300 million annualized savings by 2023.

Trane puts consistent efforts to reward its shareholders. During 2020, the company repurchased shares for $250 million and paid out dividends totaling $507.3 million. It repurchased shares for $750.1 million and $900.2 million, and paid out dividends totaling $15.8 and $41.4 million in 2019 and 2018, respectively. Such moves indicate Trane’s commitment toward boosting shareholders’ value and underlining its confidence in its business.

Other Stocks to Consider

Some other top-ranked stocks from the broader Zacks Business Services sector includes Equifax Inc. (EFX - Free Report) , Cross Country Healthcare (CCRN - Free Report)  and Charles River Associates (CRAI - Free Report) , each carrying a Zacks Rank #2 (Buy).

The long-term expected earnings per share (three to five years) growth rate for Equifax, Cross Country Healthcare and Charles River is pegged at 14%, 10.5% and 15.5%, respectively.

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