TRANE TECHNOLOGIES PLC (TT) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TT - IE00BK9ZQ967 - Common Stock
381.7 USD
+3.34 (+0.88%)
381.7 USD
0 (0%)
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 scores excellent points on both the profitability and health parts. This is a solid base for a good stock. TT is valied quite expensively at the moment, while it does show a decent growth rate. This makes TT very considerable for quality investing!
1. Profitability
1.1 Basic Checks
TT had positive earnings in the past year.
TT had a positive operating cash flow in the past year.
TT had positive earnings in each of the past 5 years.
In the past 5 years TT always reported a positive cash flow from operatings.
1.2 Ratios
TT has a better Return On Assets (13.72%) than 85.71% of its industry peers.
TT has a better Return On Equity (35.21%) than 92.86% of its industry peers.
Looking at the Return On Invested Capital, with a value of 21.47%, TT belongs to the top of the industry, outperforming 90.48% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for TT is significantly above the industry average of 12.61%.
The last Return On Invested Capital (21.47%) for TT is above the 3 year average (17.76%), which is a sign of increasing profitability.
| 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
Looking at the Profit Margin, with a value of 13.93%, TT is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
TT's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 18.79%, TT is doing good in the industry, outperforming 73.81% of the companies in the same industry.
TT's Operating Margin has improved in the last couple of years.
TT's Gross Margin of 36.42% is fine compared to the rest of the industry. TT outperforms 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.
Compared to 5 years ago, TT has less shares outstanding
TT has a better debt/assets ratio than last year.
2.2 Solvency
TT has an Altman-Z score of 6.20. This indicates that TT is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 6.20, TT is doing good in the industry, outperforming 76.19% of the companies in the same industry.
The Debt to FCF ratio of TT is 1.82, which is an excellent value as it means it would take TT, only 1.82 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 1.82, TT is doing good in 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.
With a Debt to Equity ratio value of 0.47, TT perfoms like the industry average, outperforming 54.76% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 1.82 | ||
| Altman-Z | 6.2 |
ROIC/WACC2.93
WACC7.34%
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 85.71% 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 amonst the worse of the industry: TT underperforms 80.95% of its industry peers.
TT does not score too well on the current and quick ratio evaluation. However, as it has 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.
TT shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.99% yearly.
TT shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.58%.
TT shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.69% yearly.
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
The Earnings Per Share is expected to grow by 10.27% on average over the next years. This is quite good.
TT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.20% yearly.
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
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
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
The Price/Earnings ratio is 29.77, which means the current valuation is very expensive for TT.
Based on the Price/Earnings ratio, TT is valued a bit more expensive than the industry average as 69.05% of the companies are valued more cheaply.
The average S&P500 Price/Earnings ratio is at 27.19. TT is around the same levels.
With a Price/Forward Earnings ratio of 24.96, TT is valued on the expensive side.
Based on the Price/Forward Earnings ratio, TT is valued a bit more expensive than 66.67% of the companies in the same industry.
TT's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 23.88.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.77 | ||
| Fwd PE | 24.96 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TT is valued a bit more expensive than 69.05% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as TT.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.42 | ||
| EV/EBITDA | 20.14 |
4.3 Compensation for Growth
The 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.
A more expensive valuation may be justified as TT's earnings are expected to grow with 15.53% in the coming years.
PEG (NY)1.52
PEG (5Y)2.48
EPS Next 2Y16.76%
EPS Next 3Y15.53%
5. Dividend
5.1 Amount
TT has a yearly dividend return of 0.97%, which is pretty low.
Compared to an average industry Dividend Yield of 0.74, TT pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 1.94, TT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.97% |
5.2 History
The dividend of TT is nicely growing with an annual growth rate of 9.56%!
TT has been paying a dividend for at least 10 years, so it has a reliable track record.
TT has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
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.
The dividend of TT is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP27.9%
EPS Next 2Y16.76%
EPS Next 3Y15.53%
381.7
+3.34 (+0.88%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners90.31%
Inst Owner Change0%
Ins Owners0.25%
Ins Owner Change0.52%
Market Cap84.64B
Revenue(TTM)21.05B
Net Income(TTM)2.93B
Analysts72.73
Price Target489.7 (28.29%)
Short Float %1.36%
Short Ratio2.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.97% |
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)0.01%
EPS NY rev (3m)-0.16%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.67%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.77 | ||
| Fwd PE | 24.96 | ||
| P/S | 4.02 | ||
| P/FCF | 33.42 | ||
| P/OCF | 28.83 | ||
| P/B | 10.17 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.14 |
EPS(TTM)12.82
EY3.36%
EPS(NY)15.3
Fwd EY4.01%
FCF(TTM)11.42
FCFY2.99%
OCF(TTM)13.24
OCFY3.47%
SpS94.94
BVpS37.55
TBVpS-6.27
PEG (NY)1.52
PEG (5Y)2.48
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 | 6.2 |
F-Score8
WACC7.34%
ROIC/WACC2.93
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.