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Trane Technologies plc (TT)
Intrinsic Value (DCF)
Current$387.27
→
Intrinsic$290.78
-25%
$189.44$290.78$492.39
Market implies 21% growth for 5 years
TT trades at a premium to our conservative estimate — investors expect above-average performance.
At $387, the market prices in continued strong cash flow growth (21%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $189 → Bull $492. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 10% | 12% | 14% | 16% |
|---|---|---|---|---|
| 8% | $365 | $398 | $434 | $472 |
| 10% | $245 | $267 | $291 | $316 |
| 12% | $181 | $198 | $215 | $234 |
| 14% | $142 | $155 | $169 | $183 |
Bull Case
- Bull case ($492) offers 27% upside at 17% growth, 8% discount
- Conservative 14% growth assumption is achievable based on track record
Bear Case
- Bear case ($189) implies 51% downside at 11% growth, 12% discount
- Price reflects 21% growth expectations vs 14% historical — high bar to clear
- Trading 25% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$3.17B
Year 2$3.62B
Year 3$4.14B
Year 4$4.73B
Year 5$5.41B
Terminal$85.66B
📐 Model Inputs
Growth Rate14.3%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$2.77BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.