Trane Technologies (TT) is expected to see reaccelerated growth and upside to earnings over the next three years despite near-term softness in segments like residential heating, ventilation and air conditioning, and transportation, UBS Securities said in a note emailed Tuesday.
UBS projects Trane's operating profits could exceed consensus by 4%, 9% and 16% in 2026, 2027 and 2028, respectively, and the company to deliver a solid 8% organic growth in 2025.
"Assuming some modest recovery in [residential HVAC, transportation, and light commercial], combined with sustained double-digit growth in Applied HVAC and Services, we see potential for meaningful further positive revisions in 2026 and beyond," UBS said.
The firm raised its adjusted earnings estimates to $15.40 from $14.83 for 2026 and to $18.08 from $16.31 for 2027, and expects $21.09 for 2028, all above consensus, with a potential bump to $21.80 in 2028 if excess cash is used for share buybacks. Analysts surveyed by FactSet expect $14.70 for 2026, $16.54 for 2027, and $17.90 for 2028.
UBS maintained its buy rating on the stock and raised its 12-month price target to $544 from $500.
Shares of the company were down 1% in recent trading.
Price: 429.53, Change: -4.44, Percent Change: -1.02
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