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Here's Why Trane Technologies (TT) Stock is a Great Pick

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Trane Technologies(TT - Free Report) has had an impressive run on the bourses over the past year, gaining 32%.

 Why TT is an Attractive Pick

Solid Rank:

TTcurrently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. Thus, the company appears to be a compelling investment proposition at the moment.

Earnings Expectations:

Earnings growth and stock price gains often indicate a company’s prospects. For the full year 2023, the Zacks Consensus Estimate of earnings is pegged at $8.86 per share, which indicates growth of 20.4% from the year-ago reported figure. This has been revised upward by 4.9% in the past 60 days.The favorable estimate revision reflects the confidence of brokers in the stock.

Positive Earnings Surprise History: 

TT has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in all the trailing four quarters, delivering an earnings surprise of 7.3%, on average.

Trane Technologies plc Price and EPS Surprise


Trane Technologies plc Price and EPS Surprise

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


Bullish Industry Rank:

The industry to which Trane Technologies belongs to currently has a Zacks Industry Rank of 104 (of 245 groups). Such a solid rank places the industry in the top 42% of the Zacks industries. Studies show that 50% of a stock price movement is directly tied to the performance of its industry group.

In fact, a mediocre stock in a healthy group is likely to outperform a robust stock in a poor industry. Therefore, taking the industry’s performance into account becomes necessary.

Growth Factors:

The company has consistently shown its dedication to rewarding shareholders by making dividend payments and engaging in share repurchases. Over the past four years (2022, 2021, 2020, and 2019), it repurchased shares valued at $1.2 billion, $1.1 billion, $250 million, and $750.1 million, respectively. Furthermore, it disbursed dividends of $620 million, $561.1 million, $507.3 million, and $510.1 million in 2022, 2021, 2020, and 2019, respectively. These actions underscore Trane Technologies' commitment to enhancing shareholder value and reflect its confidence in its business prospects.

The company is actively dedicated to enhancing the effectiveness of its products, introducing new offerings and improving user-friendliness. In 2022, Trane Technologies allocated $211.2 million for research and development initiatives, continuing its commitment to innovation. This investment in research and development also amounted to $193.5 million in 2021 and $165 million in 2020, demonstrating the company's ongoing efforts to drive technological advancement and product excellence.

Other Stocks to Consider

The following stocks from the broader Business Services sector are worth consideration:

Verisk Analytics(VRSK - Free Report) has beaten the Zacks Consensus Estimate in three of the four previous quarters and matched on one instance, with an average surprise of 9.9% The consensus mark for 2023 revenues is pegged at $2.66 billion, which reflects a decrease of 8.2% from the year-ago figure. Earnings are pegged at $5.71 per share for 2023, which is 14% above the year-ago figure. VRSK currently holds a Zacks Rank #2(Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Automatic Data(ADP - Free Report) currently has a Zacks Rank of 2. The company beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 3.1%. The consensus estimate for fiscal 2023 revenues and earnings implies growth of 6.3% and 11.1%, respectively.

Broadridge(BR - Free Report) currently carries a Zacks Rank of 2. It beat the Zacks Consensus Estimate in two of the trailing four quarters, missed once and matched on one instance, the average surprise being 0.5%. The consensus estimate for fiscal 2024 revenues and earnings calls for a rise of 7.2% and 8.8%, respectively.

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