TT
TTTrane Technologies is a global leader in heating, ventilation, and air conditioning (HVAC) systems, building controls, and energy services.
It is defined by its focus on innovative, climate-friendly technologies that provide energy-efficient solutions for residential, commercial, and industrial environments.
Updated: January 14, 2026, 16:00 EST
Investment Opinion: Should I buy TT Today?
TT Investment Analysis
Technical Outlook: The stock is in a weak downtrend, having declined over 3% in the past month and nearly 7% over three months. While it has shown some resilience by modestly outperforming the market recently, its high volatility (beta of 1.2) and significant past drawdown of over 21% underscore substantial downside risk. The current price sits in the middle of its 52-week range, suggesting no clear technical catalyst for a rebound.
Fundamental Quality: TT exhibits stable revenue around $5.7B quarterly and reasonable profitability with a net margin near 15%. The company maintains moderate financial health, with a comfortable debt level and strong interest coverage. However, pressure is evident as gross margins contracted slightly, and operational metrics like asset turnover are merely adequate, indicating no standout operational efficiency.
Valuation Assessment: The stock appears significantly overvalued, trading at a high P/E of nearly 28 and an exceptionally rich Price-to-Book ratio of 10.4. The deeply negative PEG ratio is a major concern, signaling that the current premium is not justified by any expected earnings growth, making the valuation difficult to sustain.
Recommendation: HOLD. While TT is a stable company with decent financial health, its weak price trend, lack of operational catalysts, and severely overvalued metrics present considerable risk. Investors should wait for a more attractive entry point or clearer signs of improved earnings growth before considering a purchase.
TT 12-Month Price Forecast
RockFlow Model Forecast: Three Scenarios for 2026
Based on the analysis, here is a 12-month outlook for TT:
12-Month Outlook for TT
The 12-month outlook for TT is neutral to negative, with limited catalysts for a significant rebound. Key potential catalysts would be a surprise improvement in earnings growth to justify its valuation or broader market strength that lifts all stable, albeit expensive, stocks. The primary risks are its rich valuation multiples, which leave it vulnerable to a de-rating if quarterlyresults disappoint or if market sentiment sours on high-priced equities. Given the lack of a clear positive catalyst and the overvaluation concerns, the stock is likely to remain range-bound or underperform, with a target range centered around the current price of $390, implying minimal expected return.
Wall Street Consensus
Most Wall Street analysts are optimistic about TT's 12-month outlook, with consensus target around $385.84, indicating expected upside potential.
Bulls vs Bears: TT Investment Factors
Overall, TT has investment potential but also faces challenges. Here are key factors to weigh before investing.
Bullish
- Strong Q3 Earnings Beat: Shares jumped 6.5% after quarterly results exceeded profit expectations
- Record HVAC Bookings: Durable growth as HVAC bookings hit records driving revenue increases
- AI Efficiency Gains: Artificial intelligence implementation boosting operational efficiency and earnings
- Circularity Innovation Leadership: Pioneering circularity metrics with goal of 10% revenue from sustainable solutions
- Morgan Stanley Overweight Rating: Maintains positive rating despite slight target reduction to $535
Bearish
- Wells Fargo Underweight Rating: Price target cut to $375 with underweight recommendation on stock
- Recent Stock Decline: Shares fell 3.45% indicating potential near-term weakness
- Competitive Market Pressure: HVAC industry facing increasing competition amid economic uncertainties
- Valuation Concerns: Multiple analyst target reductions suggest potential overvaluation concerns
- Economic Sensitivity: Residential and commercial construction markets remain cyclical and sensitive
TT Technical Analysis
Overall Assessment: TT's stock has demonstrated disappointing performance with a -3.05% decline over the past month and a more substantial -6.58% drop over three months, though it has managed to modestly outperform the broader market during this recent period with a relative strength of -9.95%.
Short-term Performance: While the stock's 1-month and 3-month returns are negative, its ability to outperform the market (indicated by the positive relative strength figure) suggests some resilience or company-specific factors may be providing relative support; however, the overall trend remains weak, and its beta of 1.216 indicates higher volatility than the market.
Current Position: Trading at $391.08, TT is positioned approximately in the middle of its 52-week range ($298.15 to $476.19), suggesting it is neither overbought nor oversold based on this metric; however, the maximum drawdown of -21.37% over the past year highlights the significant downside volatility investors have experienced.
| Period | TT Return | S&P 500 |
|---|---|---|
| 1m | -1.4% | +1.3% |
| 3m | -6.8% | +5.7% |
| 6m | -11.0% | +10.6% |
| 1y | +0.1% | +16.5% |
| ytd | -3.1% | +1.1% |
TT Fundamental Analysis
Revenue & Profitability: TT demonstrates stable but modest performance with consistent revenue levels around $5.74 billion quarterly and a net income margin of approximately 14.8%. However, the gross profit margin slightly declined to 36.9% in Q3 from 37.6% in Q2 due to a marginal increase in cost of revenue, indicating some pressure on profitability.
Financial Health: The company maintains a moderate debt position with a debt-to-equity ratio of 0.55 and a strong interest coverage of 21 times, reflecting comfortable debt servicing capability. The current ratio of 1.20 suggests adequate short-term liquidity, though the cash ratio of 0.17 indicates limited immediate cash coverage.
Operational Efficiency: TT shows reasonable efficiency with a return on equity of 10.2% and asset turnover of 0.27, indicating moderate utilization of assets to generate sales. The operating cycle of 122 days and cash conversion cycle of 63 days reflect average working capital management, while the fixed asset turnover of 2.60 suggests decent utilization of long-term assets.
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
RockFlow Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
Try Now & Get Tesla Stock RewardValuation Analysis: Is TT Overvalued?
Based on the provided multiples, TT appears significantly overvalued. The trailing and forward P/E ratios around 27.8 are high on an absolute basis, suggesting investors are paying a premium for earnings. This concern is intensified by an exceptionally high Price-to-Book (P/B) ratio of 10.39, indicating the stock price is vastly above its net asset value. The negative PEG ratio of -15.51, which results from negative earnings growth expectations, is a major red flag, signaling that the high P/E is not justified by any future growth and pointing to potential fundamental issues. The elevated EV/EBITDA of 78.84 further confirms that the company's enterprise value is expensive relative to its operational cash flow.
A peer comparison cannot be quantitatively performed as the required industry average data was not provided. For a complete assessment, it is essential to compare TT's multiples—particularly the high P/E and P/B ratios and the negative PEG—against its specific industry benchmarks. This comparison would determine if the premium valuation is sector-typical or an outlier, but based on the absolute values alone, the stock carries a high valuation risk.
Investment Risk Disclosure
Volatility Risk: TT exhibits elevated volatility risk with a Beta of 1.216, indicating it is approximately 22% more volatile than the broader market. This is corroborated by a significant one-year maximum drawdown of -21.37%, highlighting substantial downside potential during market downturns.
Other Risks: While the absence of short interest suggests minimal active speculative downside pressure, the stock remains exposed to general market and sector-specific risks. Liquidity, not detailed here, could present an additional risk factor if trading volumes are insufficient for large positions.
FAQs
Neutral to Bearish Opinion. TT is currently not an attractive buy for most investors due to significant valuation concerns and negative momentum.
Key Reasons: 1. Overvaluation Risk: The stock appears significantly overpriced with a high P/E ratio (~27.8), an exceptionally elevated P/B ratio (10.39), and a negative PEG ratio, signaling earnings growth does not justify its premium. 2. Weak Price Momentum: The stock has declined -6.58% over three months and exhibits higher volatility (Beta of 1.2), with a substantial maximum drawdown of -21.37% over the past year. 3. Mixed Signals: While operational fundamentals are stable (e.g., record HVAC bookings), analyst consensus is a Hold, and recent downgrades (e.g., Wells Fargo to Underweight) highlight near-term headwinds and valuation pressures.
Suitable Investor Types: Only suitable for highly risk-tolerant, long-term investors who strongly believe in the company's AI and sustainability initiatives and are willing to wait for potential valuation corrections. Not recommended for value investors or those with a short-term horizon.
Based on the data provided, TT stock appears significantly overvalued. The stock trades at premium valuations with a PE ratio of 27.8 and a remarkably high PB ratio of 10.4, which are expensive on an absolute basis. Most critically, the negative PEG ratio of -15.5 reveals that its high earnings multiple is not justified by growth expectations and signals underlying profitability concerns. Compared to stable but modest fundamentals like a 14.8% net margin, these valuation metrics suggest the market price incorporates overly optimistic expectations that are not supported by the company's current performance or growth trajectory.
Of course. Based on the provided data, here are the key risks of holding TT stock, ordered by importance.
1. Elevated Volatility and Downside Risk: The stock's high beta (1.216) and significant maximum drawdown (-21.37%) indicate it is substantially more volatile than the market, exposing investors to greater potential losses during market declines. 2. Profitability Pressure: While currently stable, the company faces margin pressure, as evidenced by the recent decline in gross profit margin, which could impact future earnings if cost inflation or competitive pressures persist. 3. Limited Immediate Liquidity Buffer: The low cash ratio (0.17) suggests the company has a relatively small cushion of cash to cover immediate short-term obligations, potentially increasing its vulnerability to unforeseen operational shocks or funding needs. 4. Weak Recent Price Momentum: The stock's negative performance over the past one and three months reflects weakening investor sentiment and a lack of near-term positive catalysts, which could lead to further underperformance.
Based on the provided analysis, my forecast for TT's stock performance through 2026 is cautious.
My target price range for 2026 is $350-$450, with a base case of $390 and a bull case dependent on successful execution of key growth drivers such as expanding net income margins beyond 15% and improving asset turnover. The main assumptions are that the company's stable revenue persists but that its rich valuation multiples contract slightly without significant earnings acceleration, and that market sentiment remains neutral towards high-priced, low-growth equities. This forecast carries high uncertainty, as modest changes in profitability or a shift in investor appetite for valuation could cause the stock to deviate significantly from this range.