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Here's Why a Hold Strategy is Apt for Trane Technologies (TT) Now
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Trane Technologies plc (TT - Free Report) is currently focusing on business transformation in order to achieve cost savings.
The company’s earnings for 2022 and 2023 are expected to improve 15.9% and 10.4%, respectively, year over year. The company has an expected long-term (three to five years) earnings per share growth rate of 11.3%.
Factors That Bode Well
Trane’s top line remains in good shape, driven by strength across all three segments, namely, Americas, EMEA and Asia Pacific, which reported a respective year-over-year organic growth of 13%, 6% and 14% in the first quarter of 2022. The company remains focused on increasing its revenue stream from parts, services, controls, used equipment and rentals.
Trane’s bottom line is benefiting from its improving business operating system and prudent investments. Adjusted EBITDA and adjusted operating income increased 6% and 5% year over year, respectively, in the first quarter of 2022.
Trane Technologies has a consistent record of rewarding its shareholders through dividend payments and share repurchases. In 2021, 2020 and 2019, the company had repurchased shares worth $1.10 billion, $250 million and $750.1 million, respectively. It paid $561.1 million, $507.3 million and $510.1 million in dividends during 2021, 2020 and 2019, respectively. Such moves indicate Trane’s commitment to boosting shareholders’ value and underline its confidence in its business.
Some Risks
Trane’s current ratio (a measure of liquidity) at the end of first-quarter 2022 was pegged at 1.31, lower than the current ratio of 1.36 reported at the end of fourth-quarter 2021 and the prior-year quarter’s 1.59. Decreasing current ratio is not desirable as it indicates that the company may have problems meeting its short-term debt obligations.
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Here's Why a Hold Strategy is Apt for Trane Technologies (TT) Now
Trane Technologies plc (TT - Free Report) is currently focusing on business transformation in order to achieve cost savings.
The company’s earnings for 2022 and 2023 are expected to improve 15.9% and 10.4%, respectively, year over year. The company has an expected long-term (three to five years) earnings per share growth rate of 11.3%.
Factors That Bode Well
Trane’s top line remains in good shape, driven by strength across all three segments, namely, Americas, EMEA and Asia Pacific, which reported a respective year-over-year organic growth of 13%, 6% and 14% in the first quarter of 2022. The company remains focused on increasing its revenue stream from parts, services, controls, used equipment and rentals.
Trane Technologies plc Revenue (TTM)
Trane Technologies plc revenue-ttm | Trane Technologies plc Quote
Trane’s bottom line is benefiting from its improving business operating system and prudent investments. Adjusted EBITDA and adjusted operating income increased 6% and 5% year over year, respectively, in the first quarter of 2022.
Trane Technologies has a consistent record of rewarding its shareholders through dividend payments and share repurchases. In 2021, 2020 and 2019, the company had repurchased shares worth $1.10 billion, $250 million and $750.1 million, respectively. It paid $561.1 million, $507.3 million and $510.1 million in dividends during 2021, 2020 and 2019, respectively. Such moves indicate Trane’s commitment to boosting shareholders’ value and underline its confidence in its business.
Some Risks
Trane’s current ratio (a measure of liquidity) at the end of first-quarter 2022 was pegged at 1.31, lower than the current ratio of 1.36 reported at the end of fourth-quarter 2021 and the prior-year quarter’s 1.59. Decreasing current ratio is not desirable as it indicates that the company may have problems meeting its short-term debt obligations.
Zacks Rank and Stocks to Consider
Trane currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks Business Services sector are Avis Budget Group, Inc. (CAR - Free Report) , Genpact Limited (G - Free Report) and CRA International, Inc. (CRAI - Free Report) .
Avis Budget sports a Zacks Rank #1 at present. CAR has a long-term earnings growth expectation of 19.4%.
Avis Budget delivered a trailing four-quarter earnings surprise of 102%, on average.
Genpact carries a Zacks Rank of 2 at present. G has a long-term earnings growth expectation of 12.3%.
Genpact delivered a trailing four-quarter earnings surprise of 13.3%, on average.
CRA International carries a Zacks Rank #2 (Buy), currently. CRAI has a long-term earnings growth expectation of 14.3%.
CRAI delivered a trailing four-quarter earnings surprise of 35.8%, on average.