TT Stock Forecast & Price Target

Trane Technologies has demonstrated substantial growth in its Commercial Heating, Ventilation, and Air Conditioning (CHVAC) applied equipment segment, with orders increasing by 60% in the second quarter of 2025 and an impressive 120% growth on a two-year comparison, indicating strong demand that could lead to significant aftermarket revenue opportunities. The company's adjusted operating margin has also strengthened, expanding by 90 basis points year-over-year to reach 20.3%, significantly surpassing both estimates and consensus metrics, largely driven by a notable 130 basis points improvement in the Americas region. Additionally, the Americas region achieved organic growth of 9%, consistent with expectations, while the overall performance solidifies a positive outlook for Trane Technologies amidst robust market conditions.

Trane Technologies has revised its outlook for the Americas Residential segment from an expected growth rate of mid to high single digits to a flat performance year-over-year, reflecting broader challenges in the market. This adjustment is largely attributed to a combination of factors including a canister shortage and elevated channel inventory, which are anticipated to negatively impact sales volumes significantly in the second half of 2025. Additionally, ongoing sluggishness in new home construction and existing home sales is contributing to investor concerns, mirroring trends seen with competitors like Lennox.