Trane Technologies plc (TT)
Quantitative Summary
DeterministicTT trades at 34.5x earnings, roughly in line with its sector average of 44.7x. Financial health metrics are strong: Piotroski 9/9, Altman Z 7.2 (above 3.0 safe zone threshold). DCF fair value of $301 implies 36% downside based on model assumptions.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe company exhibits exceptional fundamental quality, characterized by a robust ROIC-WACC spread of 8.6% and an impressive Piotroski F-Score of 9/9, indicating strong financial health with no negative indicators detected in the latest analysis. The DuPont decomposition reveals that this high return on equity of 33.9% is primarily driven by superior profitability rather than leverage or asset efficiency; specifically, a net margin of 13.7% outweighs an asset turnover of just 1.00x and an equity multiplier of 2.49x. This operational strength is further corroborated by an Altman Z-Score of 6.7 and a Beneish M-Score of -2.48, which collectively suggest low distress risk and minimal earnings manipulation concerns while maintaining robust profitability factors.
Despite these fundamental merits, the current valuation metrics present a significant disconnect from intrinsic value models. Trading at a P/E ratio of 32.5x, the stock commands a premium well above its implied growth rate derived from a DCF fair value calculation that suggests downside potential of -26.3%. The model assumes a ten-year free cash flow growth trajectory of 19.3%, yet the market price appears to embed aggressive expectations that are not fully supported by current valuation multiples relative to historical norms or sector peers. This discrepancy implies that while the business generates substantial alpha with an annual Fama-French return of 17.28% driven largely by its profitability factor, the equity is priced for perfection rather than realistic growth execution.
The risk-reward profile is further complicated by divergent signals between institutional quality metrics and insider behavior. While the stock demonstrates strong value characteristics through high margins and turnover efficiency, recent insider activity shows a net selling flow of $25.5 million over 90 days, potentially signaling management's view that shares are overvalued or liquidity needs outweigh confidence in near-term appreciation. The negative HML factor exposure suggests the security is not trading at a deep value discount relative to other market segments, leaving investors exposed to valuation compression if growth assumptions fail to materialize despite the company's otherwise pristine credit and profitability profile.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 7% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 10% | 12% | 14% |
|---|---|---|---|
| 2% | $356 | $276 | $223 |
| 3% | $399 | $301 | $239 |
| 4% | $456 | $332 | $258 |
Center = base case. Green = >10% upside, Red = >10% downside vs $458.92.
Pre-computed DCF: WACC=12.0%, terminal growth 3%. Fair value $301 (-36.4%). Not investment advice.
Valuation Context
Currently trading 48% above its 5-year average P/E of 23.9x.
Price Chart with Moving Averages
Quant Health Deep Dive
Profitability & Value Creation
✅ Conservative payout — room for dividend increases.
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Dividend History
| Date | Amount | Change |
|---|---|---|
| 2026-03-06 | $1.0500 | +11.7% |
| 2025-09-05 | $0.9400 | 0.0% |
| 2025-06-06 | $0.9400 | 0.0% |
| 2025-03-07 | $0.9400 | +11.9% |
| 2024-12-06 | $0.8400 | 0.0% |
| 2024-09-06 | $0.8400 | 0.0% |
| 2024-06-07 | $0.8400 | 0.0% |
| 2024-02-29 | $0.8400 | +12.0% |
| 2023-11-30 | $0.7500 | 0.0% |
| 2023-08-31 | $0.7500 | 0.0% |
| 2023-06-01 | $0.7500 | 0.0% |
| 2023-03-02 | $0.7500 | +11.9% |
Dividend and split data from SEC filings and market data. Amounts are per share, not adjusted for splits. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like XHB or XLI, the fund manager is mechanically forced to buy or sell TT shares regardless of Trane Technologies plc's individual fundamentals. We estimate $10.1B of passive capital is structurally linked to TT through 8 tracked ETFs. This substantial passive exposure means that ETF inflows and outflows — not company fundamentals — can dominate daily volume on this stock.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in Trane Technologies plc to visualize passive redemption contagion across ETFs and collateral stocks.
If Trane Technologies plc (TT) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies CATERPILLAR INC (CAT) as the most exposed collateral stock, sharing 1 ETFs with TT. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 20 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
TT Ownership Dynamics
Passive funds hold 1 in every 11 TT shares, reducing daily market volatility.
Trane Technologies plc (TT) exerts measurable gravity on the passive index market, currently representing 3.7% of the XHB (XHB) and 1.9% of the State Street Industrial Select Sector SPDR ETF (XLI). Across 19 tracked ETFs, approximately 21M shares (9.3% of float) are held by passive funds and rarely trade on the open market. As passive ownership grows, index inclusion changes may increasingly drive price discovery.
ETFs with Highest TT Exposure
Float lock-up computed from 19 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
TT Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for Trane Technologies plc over the past year sits near $421.44 (17% of 252-day volume). The current price of $458.92 trades 8.9% above this institutional floor — a sign of upside momentum, though a pullback to the POC zone is a common reversion target. The highly concentrated volume profile (17% at POC) indicates strong consensus on fair value — institutional participants have repeatedly transacted near this price.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
TT Capital Efficiency
How efficiently does Trane Technologies plc convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
Trane Technologies plc converts 66% of its EBITDA into free cash flow, an exceptional conversion rate indicating an asset-light business model with minimal capital reinvestment drag. The positive ROIC-WACC spread of 8.4% confirms that reinvested capital creates shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-04 | 194 | $486.48 | $94,377.12 |
| 2026-05-01 | 1,226 | $492.54 | $603,854.04 |
| 2026-04-28 | 3 | $485.90 | $1,457.7 |
| 2026-04-15 | 3 | $470.57 | $1,411.71 |
| 2026-04-14 | 111 | $472.94 | $52,496.34 |
| 2026-03-25 | 734 | $430.08 | $315,678.72 |
| 2026-03-24 | 111 | $424.94 | $47,168.34 |
| 2026-03-23 | 3 | $410.36 | $1,231.08 |
| 2026-03-16 | 1,473 | $422.40 | $622,195.2 |
| 2026-03-09 | 23,784 | $423.13 | $10.1M |
| 2026-02-27 | 1,012 | $457.14 | $462,625.68 |
| 2026-02-23 | 45 | $467.12 | $21,020.4 |
| 2026-02-20 | 15 | $463.69 | $6,955.35 |
| 2026-02-11 | 1 | $461.38 | $461.38 |
| 2026-01-28 | 1,810 | $392.30 | $710,063 |
| 2026-01-21 | 18,599 | $387.33 | $7.2M |
| 2026-01-20 | 13,444 | $389.53 | $5.2M |
| 2026-01-09 | 1 | $378.36 | $378.36 |
| 2025-12-18 | 207 | $382.30 | $79,136.1 |
| 2025-12-16 | 185 | $394.87 | $73,050.95 |
| 2025-12-10 | 94 | $399.00 | $37,506 |
| 2025-12-01 | 892 | $421.48 | $375,960.16 |
| 2025-11-17 | 3 | $418.16 | $1,254.48 |
| 2025-11-03 | 8,343 | $448.65 | $3.7M |
| 2025-10-31 | 66 | $446.37 | $29,460.42 |
| 2025-10-30 | 2,172 | $427.48 | $928,486.56 |
| 2025-10-27 | 739 | $425.87 | $314,717.93 |
| 2025-10-20 | 600 | $415.82 | $249,492 |
| 2025-10-15 | 3 | $424.04 | $1,272.12 |
| 2025-10-14 | 6,971 | $418.76 | $2.9M |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| JCI | 0.646 | 0.720 | Moderate |
| CARR | 0.594 | 0.641 | Moderate |
| ETN | 0.590 | 0.655 | Moderate |
| MOD | 0.575 | 0.706 | Moderate |
| LII | 0.573 | 0.616 | Moderate |
| AME | 0.569 | 0.629 | Moderate |
| PWR | 0.535 | 0.573 | Moderate |
| PH | 0.530 | 0.564 | Moderate |
| CAT | 0.529 | 0.604 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare TT to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.