Trane Technologies plc (TT) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Trane Technologies plc

Updated on October 31, 2026 · accounts published on October 29, 2026

A highly profitable industrial with a light balance sheet and a steady record of earnings beats

Trane Technologies trades at a P/E of 29.0 over the last 12 months, 12 % above its sector median of 25.9, with a ROIC of 20.8 %.

• Is Trane Technologies expensive or cheap? Its P/E of 29.0 over the last 12 months is 12 % above the sector median of 25.9, with the stock 19 % below its 52-week high.
• How is the business doing? EPS rose 16 % over the last 12 months on revenue up 8 %, and ROIC of 20.8 % is more than double the 9.1 % sector median.
• Does Trane Technologies turn its margin into cash, and at what multiple of the cycle? Cycle-adjusted EV/EBITDA of 20.9× is within 10 % of its seven-year average of 19.4×, neither cheap nor expensive for its cycle.
• How strong is the balance sheet? Net debt was 0.7× EBITDA in fiscal 2025, far below the 3.0× ceiling considered healthy for industrials.
• What to expect from the next earnings? Analysts expect EPS of $3.59 when Trane Technologies reports on February 4, 2027, after 8 straight quarterly beats.

Is Trane Technologies expensive or cheap?

Over the last 12 months Trane Technologies trades at a P/E of 29.0, a 12 % premium to the 25.9 median of 297 industrial companies. The other measures tell the same story: EV/EBITDA of 20.9×, P/B of 9.9× and a free cash flow yield of 2.8 %, so each dollar invested buys less than three cents of annual cash. The share price has fallen 8 % over the past year and sits 19 % below its 52-week high of $503.46. The premium has narrowed but has not gone away. Investors are still paying up for quality here.

How is the business doing?

Over the last 12 months revenue rose 8 % and EPS 16 %, so profits are growing about twice as fast as sales. An operating margin of 18 % and a net margin of 14 % turn that growth into real earnings. ROIC stands at 20.8 %, 11.7 points above the 9.1 % median of 454 sector peers and well past the 15 % considered healthy for industrials. The decade has been less even: ROIC topped 10 % in 6 of the 10 fiscal years from 2016 to 2025, with a low of 8.1 % in 2020. A Piotroski score of 9 out of 9 points to improving fundamentals.

Does Trane Technologies turn its margin into cash, and at what multiple of the cycle?

Industrials are semi-cyclical, so the order book, the operating margin and free cash flow conversion matter more than a single year's profit. On conversion, Trane Technologies looks solid: its free cash flow yield of 2.8 % over the last 12 months almost matches its earnings yield of 2.9 %, so reported profit is arriving as cash. Against its own cycle, EV/EBITDA of 20.9× sits inside the band of 90 % to 110 % of its seven-year average of 19.4×. Capex was 1.8 % of revenue in fiscal 2025, below the 4 % to 8 % range the sector treats as healthy, a figure to watch if investment needs rise.

How strong is the balance sheet?

Debt is modest. Net debt stood at 0.7× EBITDA in fiscal 2025, a fraction of the 3.0× limit the sector considers healthy, and debt to equity is 0.46 over the last 12 months. The Altman Z score of 6.4 sits well inside the safe zone, which starts at 2.99. The one tight spot is liquidity: a current ratio of 1.12 means short-term assets only just cover short-term liabilities. Shareholders receive a dividend yield of 1.0 % over the last 12 months, a small income stream for a stock priced at 29 times earnings.

What to expect from the next earnings?

Trane Technologies has beaten EPS estimates in each of the last 8 quarters. On October 29, 2026 it reported EPS of $4.86 against $4.73 expected, a beat of 2.7 %. For the next quarter, due on February 4, 2027, analysts expect $3.59. The 2026 EPS consensus has barely moved in the last 30 days, from $15.28 to $15.29 across 14 analysts, and revenue forecasts are also stable. Of 27 analysts, 12 rate the stock a buy, 14 a hold and 1 a sell, a split that shows confidence in the business tempered by the current price.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.