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- If you are wondering whether Trane Technologies’ current share price lines up with its underlying value, this article will walk through the key numbers that matter for you as an investor.
- The stock last closed at US$460.45, with returns of 5.6% over 7 days, 17.7% over 30 days, 15.7% year to date, 28.7% over 1 year, 159.2% over 3 years and 228.9% over 5 years. Those figures naturally raise questions about what is already priced in and how much risk you are taking on at these levels.
- Recent news flow around Trane Technologies has largely centered on its role in heating, ventilation and air conditioning solutions and how investors are thinking about long term demand for energy efficient systems. That context helps explain why the market may be reassessing both the growth potential and the risks attached to the stock.
- Right now, the company has a valuation score of 1 out of 6, which reflects how many of our checks suggest the shares are undervalued. We will shortly look at how different valuation approaches treat Trane Technologies, before finishing with a tool that can help you make even more sense of those valuation signals.
- Trane Technologies scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
- Approach 1: Trane Technologies Discounted Cash Flow (DCF) Analysis
- A Discounted Cash Flow model takes estimates of the cash a business could generate in the future, then discounts those cash flows back to today to arrive at an estimate of what the company might be worth right now.
- For Trane Technologies, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is about $2.81b, and analyst and extrapolated projections suggest free cash flow reaching around $6.81b in 2035, with intermediate years such as 2026 and 2029 at $3.28b and $4.70b. Simply Wall St uses analyst inputs where available, then extends those forecasts out over 10 years to build the full cash flow curve.
- Discounting those projected cash flows back to today produces an estimated intrinsic value of about $370.60 per share, compared with the recent share price of $460.45. That implies the shares are around 24.2% above this particular DCF estimate.
Boykin Air 