Trane Technologies

Industrial - Machinery · Industrials

Price

$469.98

-5.02 (-1.06%)

Market Cap

$103.89B

Winston Score

Winston is serious

Mixed quality — meaningful strengths and weaknesses.

Share count falling — buybacks

−7.7% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 242.3M (2021) → 223.6M (2025)

Trane Technologies makes heating, ventilation, and air conditioning (HVAC) systems for buildings and homes. Its main brands are Trane and Thermo King, and it sells to commercial buildings, schools, hospitals, data centers, and homeowners. The company is one of the largest HVAC manufacturers in the world and also makes refrigeration units for trucks and trailers that keep food cold during transport.

Trane makes money by selling equipment and then earning more revenue from service contracts, parts, and repairs over the life of that equipment. It operates globally, with strong sales across North America, Europe, and Asia, and generates roughly $18 billion in annual revenue. Its installed base of equipment creates a recurring stream of service income, which is a meaningful competitive advantage. The biggest growth driver is rising demand for energy-efficient climate systems, especially from data centers expanding rapidly due to AI infrastructure buildout, though higher interest rates that slow construction activity remain a key risk.

Winston Score History

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+6.0% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

-3.3% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$0/ year

0.0% of revenue

Below sector average (4%)

Research and development spending

Insider Activity

0.3%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$1.1B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

Trane Technologies is growing revenue at 6% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

34.8%

Modest — 34.8% gross margin

Operating Margin

15.6%

Healthy — 15.6% operating margin

ROCE

5.9%

Weak — 5.9% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY

+6.4%

Slow sales growth (6.4% YoY)

EPS YoY

+7.2%

Modest earnings growth (7.2% YoY)

Single-digit earnings growth — steady but not exciting.

EPS Consistency

4/8 quarters

Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion

121%

Turns 121% of profit into real cash

FCF Margin

14.6%

Converts sales into free cash efficiently (14.6%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

0.54

Conservative — low debt load (0.54)

Interest Cover

17.44x

Comfortably covers interest (17.4x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

36.1x

Pricey — P/E 36.1

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward

+12.0

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (36.1 → 24.1)

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Dividends

Dividend Yield

0.84%

Small dividend — 0.84% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend Growth

+11.7%

Dividend growing fast (11.7% YoY)

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