TT
Trane Technologies plc
$458.89
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 20.1% above fair value
You pay
$458.89
Bear
$244.86
Fair
$382.15
Bull
$532.30
Bear
$244.86
-46.6%
9% stage 1 growth, 11% discount
Fair
$382.15
-16.7%
14% stage 1 growth, 11% discount
Bull
$532.30
+16.0%
19% stage 1 growth, 11% discount
Adjust Assumptions
14.3%
11.0%
3.0%
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
42%
Implied Market Multiple
35.4x
Market is pricing in (growth)
16.6%
vs 14.2% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (27 analysts)
$548.44
Divergence from AlphaVal
30%
Summary
Using a two-stage FCF DCF with 14% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $382.15 per share.
Warnings
Wall Street's average price target is $548.44 (from 27 analysts). Our estimate is 30% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions