Trane Technologies shares rise as earnings beat expectations
Record backlog of $7.8 billion and strong 2026 guidance drive investor optimism
Trane Technologies reported stronger-than-expected fourth-quarter earnings on Thursday, driven by robust demand across its commercial HVAC business and a record backlog that provides visibility for continued growth.
The Dublin-based industrial manufacturer reported adjusted earnings per share of $2.86, exceeding Wall Street expectations of $2.82, according to analyst consensus data. Revenue reached $5.145 billion, topping the projected $5.09 billion, representing a 6 percent increase from the prior year.
Perhaps most notably for investors, the company ended the period with a record backlog of $7.8 billion, up 15 percent year-over-year, as organic bookings surged 22 percent. The growing order book signals sustained demand for Trane's heating, ventilation, and air conditioning systems as businesses invest in energy-efficient building solutions.
"Our strong performance this quarter reflects the resilience of our business model and the critical role our solutions play in helping customers meet their sustainability goals," the company said in a statement accompanying the results.
Looking ahead, Trane Technologies issued upbeat guidance for fiscal 2026, forecasting earnings per share of $14.65 to $14.85, compared with $13.06 for the just-completed fiscal year. The midpoint of that range represents approximately 13 percent growth.
The company also returned significant capital to shareholders, deploying $1.5 billion in share repurchases during the quarter. Trane's market data shows the stock currently trades at approximately $394, with a forward price-to-earnings ratio of 26.53 times earnings, reflecting investor confidence in the company's growth trajectory.
Analysts maintain a broadly positive outlook on the stock, with a consensus "Moderate Buy" rating and an average target price of $478.27, according to market data. Of 24 analysts covering the company, nine rate it a buy or strong buy, while 14 recommend holding.
Trane's performance stands out amid a competitive HVAC landscape that includes Carrier Global and Johnson Controls. The company reported $14.2 billion in commercial HVAC sales during 2025, positioning it as a market leader ahead of Carrier's $12.8 billion in commercial revenue, according to industry analysis.
The broader HVAC equipment market is projected to grow from $179.25 billion in 2025 to $193.06 billion in 2026, according to market research. Trane is well-positioned to capture this growth through its focus on energy-efficient technologies and sustainable building solutions.
The company has committed to reducing customer greenhouse gas emissions by one gigaton by 2030 and achieving net-zero emissions by 2050. This sustainability focus aligns with increasing regulatory pressure and corporate commitments to reduce carbon footprints, creating a long-term tailwind for Trane's business.
Commercial HVAC demand, particularly from data centers requiring advanced cooling solutions, has been a key growth driver. Trane's Applied HVAC and Services segments are expected to deliver sustained double-digit growth, supporting the company's overall expansion targets.
Investors will be watching for management commentary on the outlook for 2026 during the earnings conference call, particularly regarding any updates on supply chain conditions, pricing dynamics, and the timing of project deliveries across end markets.