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    Trane Technologies plc

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 240.10

    Market price

    USD 413.33

    Implied upside

    -41.9%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Current EV/EBITDA of 21.5x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 240.10-41.9%
    Exit multiple
    USD 394.82-4.5%
    Market price
    USD 413.33

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn5bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 24.1bnUSD 26.5bnUSD 28.9bnUSD 31.2bnUSD 33.4bnUSD 35.5bnUSD 37.3bnUSD 39.0bnUSD 40.3bnUSD 41.3bn+6.1%
    EBITUSD 4.1bnUSD 4.5bnUSD 4.9bnUSD 5.3bnUSD 5.7bnUSD 6.0bnUSD 6.3bnUSD 6.6bnUSD 6.8bnUSD 7.0bn+6.1%
    NOPATUSD 3.3bnUSD 3.6bnUSD 3.9bnUSD 4.3bnUSD 4.6bnUSD 4.9bnUSD 5.1bnUSD 5.3bnUSD 5.5bnUSD 5.6bn+6.1%
    Add depreciation & amortisationUSD 462.9mUSD 508.5mUSD 553.9mUSD 598.3mUSD 640.7mUSD 680.3mUSD 716.0mUSD 747.1mUSD 772.6mUSD 792.0m+6.1%
    Less capital expenditureUSD -433.9mUSD -527.1mUSD -629.1mUSD -738.9mUSD -854.8mUSD -975.1mUSD -1.1bnUSD -1.2bnUSD -1.3bnUSD -1.4bn+14.3%
    Capex, % of revenue1.8%2.0%2.2%2.4%2.6%2.7%2.9%3.1%3.3%3.5%-
    Less increase in working capitalUSD -446.8mUSD -377.0mUSD -375.5mUSD -367.0mUSD -350.9mUSD -327.2mUSD -295.7mUSD -256.8mUSD -211.2mUSD -159.7m-10.8%
    Free cashflow to firmUSD 2.9bnUSD 3.2bnUSD 3.5bnUSD 3.8bnUSD 4.0bnUSD 4.2bnUSD 4.4bnUSD 4.6bnUSD 4.7bnUSD 4.8bn+5.9%
    Discount factor0.95600.87370.79850.72970.66690.60950.55700.50910.46520.4252-
    Present valueUSD 2.8bnUSD 2.8bnUSD 2.8bnUSD 2.7bnUSD 2.7bnUSD 2.6bnUSD 2.5bnUSD 2.3bnUSD 2.2bnUSD 2.1bn-
    Present Value Of The ForecastUSD 25.4bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.132Reported 1.197, pulled toward 1.0 (Blume)
    Cost of equity9.68%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 17.5x interest cover. Book interest / average debt was lower, at 4.8%.
    Market capitalisationUSD 90.5bn95.1% of capital
    Total debtUSD 4.6bn4.9% of capital, book value as a proxy
    Tax rate19.3%Effective, capped at statutory
    WACC9.42%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 240.10

    55% of EV

    Forecast FCFF, final year
    USD 4.8bn
    Capex at depreciation, working capital in reinvestment
    USD 5.6bn
    Less reinvestment at g/ROIC (11.6% of NOPAT)
    USD -657.4m
    Capitalised
    USD 5.0bn
    ROIC (reported)
    21.5%
    Terminal value, undiscounted
    USD 73.9bn
    Terminal value, discounted
    USD 31.4bn
    Enterprise value
    USD 56.8bn
    Less net debt
    USD 2.9bn
    Equity value
    USD 54.0bn

    Exit at 20.0x EBITDA

    Value per shareUSD 394.82

    72% of EV

    Terminal value, undiscounted
    USD 155.7bn
    Terminal value, discounted
    USD 66.2bn
    Enterprise value
    USD 91.6bn
    Less net debt
    USD 2.9bn
    Equity value
    USD 88.8bn

    Spread between methods: 49%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.42%316.94329.56345.01364.26388.76
    8.42%267.39274.78283.64294.36307.51
    9.42%230.49234.89240.10246.30253.75
    10.42%201.97204.56207.62211.24215.55
    11.42%179.30180.75182.49184.55187.01

    Outlined: this model. Green text: above today's price of 413.33. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year10.1%6.8%13.7%
    EBIT margin18.6%16.9%28.1%
    Discount rate-9.4%6.6%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.