BofA Securities upgrades Trane Technologies stock rating to Buy on strong execution

Investing.com - BofA Securities upgraded Trane Technologies (NYSE:TT) from Neutral to Buy on Thursday, raising its price target to $550.00 from $490.00. The HVAC giant, with a market capitalization of $93.52 billion, currently trades at a P/E ratio of 32.28, which InvestingPro data indicates is significantly above its Fair Value.

The upgrade reflects Trane’s successful navigation through the residential slowdown in the second half of 2025 and its potential upside in 2026, according to the research firm. The company has maintained profitability with $21.05 billion in revenue over the last twelve months, showing 8.58% growth.

BofA Securities highlighted Trane’s strong exposure to applied HVAC, which represents approximately 22% of revenue, and noted the company should benefit from Americas Transport recovery in 2026.

The firm pointed to Trane’s growing service business, which represents one-third of revenue, as a factor that dampens cyclicality and has helped the company outperform HVAC peers and Street expectations.

Despite tough comparisons, Trane’s Americas Commercial HVAC business saw orders increase approximately 30%, with particular strength in data centers, education, government, and healthcare sectors.

In other recent news, Trane Technologies reported its third-quarter earnings for 2025, surpassing expectations for earnings per share (EPS) but missing revenue forecasts. The company posted an EPS of $3.88, exceeding the anticipated $3.78, while its revenue reached $5.74 billion, slightly below the expected $5.79 billion. These results highlight a mixed performance for the company in the quarter. Despite the earnings beat, the revenue shortfall may have contributed to varied investor reactions. Analysts had projected higher revenue, which suggests the company’s sales did not meet market predictions. The earnings report reflects the ongoing dynamics in the company’s financial landscape. Investors are likely to monitor future developments closely to assess the company’s trajectory.

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