TT Stock Forecast & Price Target

Trane Technologies has demonstrated significant growth potential, with a substantial 60% increase in orders for CHVAC applied equipment in the second quarter of 2025, coupled with a remarkable 120% growth over a two-year period, suggesting a strong foundation for future aftermarket revenue. The company's adjusted operating margin expanded by 90 basis points year-over-year to reach 20.3%, exceeding both internal estimates and consensus forecasts, reflecting robust operational efficiency, particularly in the Americas segment. Furthermore, organic revenue growth in the Americas matched expectations at 9%, while EMEA also contributed positively, enhancing the overall financial outlook for the company.

Trane Technologies has revised its outlook for the Americas Residential segment to flat year-over-year for 2025, significantly down from an earlier forecast of mid to high single-digit percentage growth, primarily due to a canister shortage and elevated channel inventory levels. This reduction in expectations aligns with broader market trends, as indicated by competitor Carrier's projections of decline in residential HVAC volumes of high-teens to mid-20s percentages in the second half of 2025. Additionally, ongoing challenges in new home construction and sluggish existing home sales have contributed to negative investor sentiment, particularly impacting the outlook for residential HVAC demand.