TRANE TECHNOLOGIES PLC (TT) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TT - IE00BK9ZQ967 - Common Stock
389.2 USD
-2.51 (-0.64%)
389.3 USD
+0.1 (+0.03%)
We assign a fundamental rating of 7 out of 10 to TT. TT was compared to 42 industry peers in the Building Products industry. TT gets an excellent profitability rating and is at the same time showing great financial health properties. TT is quite expensive at the moment. It does show a decent growth rate. These ratings would make TT suitable for quality investing!
1. Profitability
1.1 Basic Checks
TT had positive earnings in the past year.
In the past year TT had a positive cash flow from operations.
TT had positive earnings in each of the past 5 years.
TT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 13.72%, TT belongs to the best of the industry, outperforming 85.71% of the companies in the same industry.
Looking at the Return On Equity, with a value of 35.21%, TT belongs to the top of the industry, outperforming 92.86% of the companies in the same industry.
With an excellent Return On Invested Capital value of 21.47%, TT belongs to the best of the industry, outperforming 90.48% of the companies in the same industry.
TT had an Average Return On Invested Capital over the past 3 years of 17.76%. This is significantly above the industry average of 12.61%.
The 3 year average ROIC (17.76%) for TT is below the current ROIC(21.47%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.72% | ||
| ROE | 35.21% | ||
| ROIC | 21.47% |
ROA(3y)10.97%
ROA(5y)9.1%
ROE(3y)30.74%
ROE(5y)25.66%
ROIC(3y)17.76%
ROIC(5y)15.01%
1.3 Margins
TT has a better Profit Margin (13.93%) than 71.43% of its industry peers.
In the last couple of years the Profit Margin of TT has grown nicely.
TT has a Operating Margin of 18.79%. This is in the better half of the industry: TT outperforms 73.81% of its industry peers.
TT's Operating Margin has improved in the last couple of years.
The Gross Margin of TT (36.42%) is better than 64.29% of its industry peers.
In the last couple of years the Gross Margin of TT has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.79% | ||
| PM (TTM) | 13.93% | ||
| GM | 36.42% |
OM growth 3Y6.75%
OM growth 5Y6.01%
PM growth 3Y8.74%
PM growth 5Y3.71%
GM growth 3Y4.06%
GM growth 5Y2.99%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so TT is creating value.
The number of shares outstanding for TT has been reduced compared to 1 year ago.
TT has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, TT has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 6.34 indicates that TT is not in any danger for bankruptcy at the moment.
TT has a better Altman-Z score (6.34) than 73.81% of its industry peers.
TT has a debt to FCF ratio of 1.82. This is a very positive value and a sign of high solvency as it would only need 1.82 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.82, TT is in the better half of the industry, outperforming 76.19% of the companies in the same industry.
TT has a Debt/Equity ratio of 0.47. This is a healthy value indicating a solid balance between debt and equity.
TT has a Debt to Equity ratio (0.47) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 1.82 | ||
| Altman-Z | 6.34 |
ROIC/WACC2.92
WACC7.35%
2.3 Liquidity
TT has a Current Ratio of 1.20. This is a normal value and indicates that TT is financially healthy and should not expect problems in meeting its short term obligations.
TT has a worse Current ratio (1.20) than 83.33% of its industry peers.
A Quick Ratio of 0.84 indicates that TT may have some problems paying its short term obligations.
TT has a Quick ratio of 0.84. This is in the lower half of the industry: TT underperforms 78.57% of its industry peers.
The current and quick ratio evaluation for TT is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.2 | ||
| Quick Ratio | 0.84 |
3. Growth
3.1 Past
TT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 18.92%, which is quite good.
The Earnings Per Share has been growing by 11.99% on average over the past years. This is quite good.
The Revenue has grown by 8.58% in the past year. This is quite good.
Measured over the past years, TT shows a quite strong growth in Revenue. The Revenue has been growing by 8.69% on average per year.
EPS 1Y (TTM)18.92%
EPS 3Y22.59%
EPS 5Y11.99%
EPS Q2Q%15.13%
Revenue 1Y (TTM)8.58%
Revenue growth 3Y11.96%
Revenue growth 5Y8.69%
Sales Q2Q%5.54%
3.2 Future
Based on estimates for the next years, TT will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.27% on average per year.
The Revenue is expected to grow by 7.20% on average over the next years.
EPS Next Y19.57%
EPS Next 2Y16.76%
EPS Next 3Y15.53%
EPS Next 5Y10.27%
Revenue Next Year7.75%
Revenue Next 2Y7.71%
Revenue Next 3Y7.66%
Revenue Next 5Y7.2%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 30.36 indicates a quite expensive valuation of TT.
TT's Price/Earnings ratio is a bit more expensive when compared to the industry. TT is more expensive than 66.67% of the companies in the same industry.
TT is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.51, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 25.45 indicates a quite expensive valuation of TT.
Based on the Price/Forward Earnings ratio, TT is valued a bit more expensive than the industry average as 66.67% of the companies are valued more cheaply.
When comparing the Price/Forward Earnings ratio of TT to the average of the S&P500 Index (23.13), we can say TT is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.36 | ||
| Fwd PE | 25.45 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TT is valued a bit more expensive than the industry average as 71.43% of the companies are valued more cheaply.
TT's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.07 | ||
| EV/EBITDA | 20.83 |
4.3 Compensation for Growth
TT's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of TT may justify a higher PE ratio.
TT's earnings are expected to grow with 15.53% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.55
PEG (5Y)2.53
EPS Next 2Y16.76%
EPS Next 3Y15.53%
5. Dividend
5.1 Amount
TT has a yearly dividend return of 0.96%, which is pretty low.
TT's Dividend Yield is a higher than the industry average which is at 0.72.
With a Dividend Yield of 0.96, TT pays less dividend than the S&P500 average, which is at 2.00.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.96% |
5.2 History
On average, the dividend of TT grows each year by 9.56%, which is quite nice.
TT has been paying a dividend for at least 10 years, so it has a reliable track record.
TT has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)9.56%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
TT pays out 27.90% of its income as dividend. This is a sustainable payout ratio.
TT's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP27.9%
EPS Next 2Y16.76%
EPS Next 3Y15.53%
389.2
-2.51 (-0.64%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners90.2%
Inst Owner Change-1.86%
Ins Owners0.25%
Ins Owner Change0.52%
Market Cap86.30B
Revenue(TTM)21.05B
Net Income(TTM)2.93B
Analysts72.73
Price Target489.7 (25.82%)
Short Float %1.36%
Short Ratio2.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.96% |
Yearly Dividend3.35
Dividend Growth(5Y)9.56%
DP27.9%
Div Incr Years14
Div Non Decr Years14
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.51%
Min EPS beat(2)-0.67%
Max EPS beat(2)-0.35%
EPS beat(4)1
Avg EPS beat(4)1.55%
Min EPS beat(4)-0.67%
Max EPS beat(4)7.49%
EPS beat(8)4
Avg EPS beat(8)2.85%
EPS beat(12)8
Avg EPS beat(12)3.02%
EPS beat(16)11
Avg EPS beat(16)3.16%
Revenue beat(2)0
Avg Revenue beat(2)-3.52%
Min Revenue beat(2)-3.65%
Max Revenue beat(2)-3.39%
Revenue beat(4)1
Avg Revenue beat(4)-1.63%
Min Revenue beat(4)-3.65%
Max Revenue beat(4)1.64%
Revenue beat(8)3
Avg Revenue beat(8)-0.97%
Revenue beat(12)4
Avg Revenue beat(12)-0.99%
Revenue beat(16)6
Avg Revenue beat(16)-0.59%
PT rev (1m)-0.38%
PT rev (3m)4.3%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.55%
EPS NY rev (1m)-0.09%
EPS NY rev (3m)-0.16%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.67%
Revenue NY rev (1m)-0.45%
Revenue NY rev (3m)-1.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.36 | ||
| Fwd PE | 25.45 | ||
| P/S | 4.1 | ||
| P/FCF | 34.07 | ||
| P/OCF | 29.4 | ||
| P/B | 10.36 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.83 |
EPS(TTM)12.82
EY3.29%
EPS(NY)15.3
Fwd EY3.93%
FCF(TTM)11.42
FCFY2.93%
OCF(TTM)13.24
OCFY3.4%
SpS94.94
BVpS37.55
TBVpS-6.27
PEG (NY)1.55
PEG (5Y)2.53
Graham Number104.07
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.72% | ||
| ROE | 35.21% | ||
| ROCE | 26.64% | ||
| ROIC | 21.47% | ||
| ROICexc | 23.24% | ||
| ROICexgc | 79.55% | ||
| OM | 18.79% | ||
| PM (TTM) | 13.93% | ||
| GM | 36.42% | ||
| FCFM | 12.03% |
ROA(3y)10.97%
ROA(5y)9.1%
ROE(3y)30.74%
ROE(5y)25.66%
ROIC(3y)17.76%
ROIC(5y)15.01%
ROICexc(3y)19.7%
ROICexc(5y)17.25%
ROICexgc(3y)86.55%
ROICexgc(5y)79.73%
ROCE(3y)22.03%
ROCE(5y)18.62%
ROICexgc growth 3Y9.37%
ROICexgc growth 5Y29.75%
ROICexc growth 3Y15.09%
ROICexc growth 5Y17.85%
OM growth 3Y6.75%
OM growth 5Y6.01%
PM growth 3Y8.74%
PM growth 5Y3.71%
GM growth 3Y4.06%
GM growth 5Y2.99%
F-Score8
Asset Turnover0.98
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 1.82 | ||
| Debt/EBITDA | 0.9 | ||
| Cap/Depr | 105.39% | ||
| Cap/Sales | 1.91% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 67.67% | ||
| Profit Quality | 86.39% | ||
| Current Ratio | 1.2 | ||
| Quick Ratio | 0.84 | ||
| Altman-Z | 6.34 |
F-Score8
WACC7.35%
ROIC/WACC2.92
Cap/Depr(3y)91.41%
Cap/Depr(5y)79.68%
Cap/Sales(3y)1.8%
Cap/Sales(5y)1.63%
Profit Quality(3y)93.42%
Profit Quality(5y)105.39%
High Growth Momentum
Growth
EPS 1Y (TTM)18.92%
EPS 3Y22.59%
EPS 5Y11.99%
EPS Q2Q%15.13%
EPS Next Y19.57%
EPS Next 2Y16.76%
EPS Next 3Y15.53%
EPS Next 5Y10.27%
Revenue 1Y (TTM)8.58%
Revenue growth 3Y11.96%
Revenue growth 5Y8.69%
Sales Q2Q%5.54%
Revenue Next Year7.75%
Revenue Next 2Y7.71%
Revenue Next 3Y7.66%
Revenue Next 5Y7.2%
EBIT growth 1Y17.03%
EBIT growth 3Y19.52%
EBIT growth 5Y15.23%
EBIT Next Year24.93%
EBIT Next 3Y15.16%
EBIT Next 5Y8.89%
FCF growth 1Y32.68%
FCF growth 3Y26.67%
FCF growth 5Y10.75%
OCF growth 1Y32.52%
OCF growth 3Y25.58%
OCF growth 5Y10.38%
TRANE TECHNOLOGIES PLC / TT FAQ
What is the fundamental rating for TT stock?
ChartMill assigns a fundamental rating of 7 / 10 to TT.
Can you provide the valuation status for TRANE TECHNOLOGIES PLC?
ChartMill assigns a valuation rating of 2 / 10 to TRANE TECHNOLOGIES PLC (TT). This can be considered as Overvalued.
What is the profitability of TT stock?
TRANE TECHNOLOGIES PLC (TT) has a profitability rating of 9 / 10.
Can you provide the financial health for TT stock?
The financial health rating of TRANE TECHNOLOGIES PLC (TT) is 7 / 10.
What is the expected EPS growth for TRANE TECHNOLOGIES PLC (TT) stock?
The Earnings per Share (EPS) of TRANE TECHNOLOGIES PLC (TT) is expected to grow by 19.57% in the next year.