Trane Technologies (TT) Laps the Stock Market: Here's Why

Trane Technologies (TT) closed at $491.16 in the latest trading session, marking a +2.25% move from the prior day. The stock outperformed the S&P 500, which registered a daily gain of 0.79%. At the same time, the Dow added 0.26%, and the tech-heavy Nasdaq gained 1.52%.

Coming into today, shares of the manufacturer had gained 7.11% in the past month. In that same time, the Business Services sector lost 0.14%, while the S&P 500 lost 1.82%.

Investors will be eagerly watching for the performance of Trane Technologies in its upcoming earnings disclosure. On that day, Trane Technologies is projected to report earnings of $4.27 per share, which would represent year-over-year growth of 10.05%. At the same time, our most recent consensus estimate is projecting a revenue of $6.16 billion, reflecting a 7.22% rise from the equivalent quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $14.83 per share and revenue of $23.25 billion, indicating changes of +13.55% and +9.05%, respectively, compared to the previous year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Trane Technologies. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Trane Technologies is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, Trane Technologies is presently being traded at a Forward P/E ratio of 32.39. This indicates a premium in contrast to its industry's Forward P/E of 17.1.

We can additionally observe that TT currently boasts a PEG ratio of 2.22. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Technology Services industry had an average PEG ratio of 1.46 as trading concluded yesterday.

Story Continues

The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 157, putting it in the bottom 36% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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