Reasons Why You Should Bet on Trane Technologies (TT) Now

·4 min read

Trane Technologies plc TT has performed extremely well over the past year and has the potential to sustain the momentum in the near term. Consequently, if you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.

What Makes Trane an Attractive Pick?

An Outperformer: A glimpse at the company’s price trend reveals that the stock has had an impressive run over the past year. Shares of Trane Technologies have returned 22.4% against the 21.5% decline of the industry it belongs to.

Trane Technologies plc Price

Trane Technologies plc Price
Trane Technologies plc Price

Trane Technologies plc price | Trane Technologies plc Quote

Solid Rank: Trane Technologies currently carries a Zacks Rank #2 (Buy) and has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities. Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.

Northward Estimate Revisions: The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Nine estimates for 2023 have moved north over the past 60 days versus no southward revisions, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for 2023 earnings has climbed 6.8%.

Positive Earnings Surprise History: Trane has an impressive earnings surprise history. The company outpaced the consensus mark in all the trailing four quarters, delivering an average beat of 8.2%.

Strong Growth Prospects: The company’s Zacks Consensus Estimate for 2023 earnings of $8.35 indicates year-over-year growth of 13.5%. Moreover, earnings are expected to register 7.8% growth in 2024. The stock’s long-term expected earnings per share growth rate is 9.8%.

Growth Factors: The company remains focused on improving its business operating system and innovation through business transformation initiatives and investments. The company has reduced costs by roughly $240 million in 2022 and targets an additional $60 million reduction by 2023 for a total of $300 million under its current transformation initiatives.

The recent acquisition of AL-KO Air Technology is expected to expand Trane’s Commercial HVAC product and services portfolios in Europe and Asia. The buyout added high-performing air handling, extraction and ventilation solutions to these portfolios.

Other Stocks to Consider

Investors interested in the broader Zacks Business Service sector may consider some other top-ranked stocks like ICF International ICFI and Omnicom Group OMC.

ICF International is being aided by a strong government business, courtesy of improvement in the business development pipeline and win rate. ICFI reported better-than-expected results in the fourth quarter of 2022. Quarterly earnings (excluding $1.09 from non-recurring items) came in at $1.56, beating the Zacks Consensus mark by 4.7% and increasing 31.1% from the year-ago reported figure. For first-quarter 2023, ICFI’s earnings are expected to register 6.1% growth on a year-over-year basis. For 2023, the company’s earnings are expected to grow 6.4% on a year-over-year basis.

The Zacks Consensus Estimate for the company’s earnings is pegged at $1.39 for first-quarter 2023, which has been revised 4.5% upward in the past 60 days and $6.14 for the full year, which has been revised 4% upward in the past 60 days. The company currently sports a Zacks Rank of 1.

Omnicom's internal development initiatives and shareholder-friendly policies ensure its long-term profitability. OMC also reported better-than-expected results in the fourth quarter of 2022. Earnings of $2.09 per share beat the consensus mark by 7.7% and increased 7.2% year over year, driven by a strong margin performance. For first-quarter 2023, OMC’s earnings are expected to match the year-ago reported figure of $1.39. The company’s earnings are expected to grow 3.2% on a year-over-year basis in 2023.

The Zacks Consensus Estimate for the company’s earnings is pegged at $1.39 for first-quarter 2023, which has been revised downward by 2.1% in the past 60 days and $7.15 for the full year, which has been revised 13.7% upward in the past 60 days. The company currently sports a Zacks Rank of 1.

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