TT
Trane Technologies plc
$474.95
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 7.4% above fair value
You pay
$474.95
Bear
$269.42
Fair
$442.20
Bull
$638.82
Bear
$269.42
-43.3%
10% stage 1 growth, 11% discount
Fair
$442.20
-6.9%
16% stage 1 growth, 11% discount
Bull
$638.82
+34.5%
21% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (16% base case)
Terminal Value % of EV
43%
Implied Market Multiple
38.4x
Market is pricing in (growth)
17.7%
vs 15.9% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $529.50 from 26 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $442.20 per share.
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