Trane Technologies (TT) Up 12.4% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Trane Technologies (TT). Shares have added about 12.4% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Trane Technologies due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers. Trane Technologies Q3 Earnings Beat EstimatesTrane Technologies reported better-than-expected third-quarter 2024 results.Adjusted EPS of $3.37 surpassed the Zacks Consensus Estimate by 4.3% and increased 20.8% year over year.Revenues of $5.4 billion beat the consensus mark by 2.4% and increased 11% year over year on a reported basis and organically. Bookings were up 5% year over year on a reported basis and organically.Revenues and BookingsThe Americas segment’s revenues of $4.5 billion were higher than our estimate of $4 billion and increased 15% year over year on a reported basis and organically. Bookings were up 8% on a reported basis and organically, at $4.3 billion.Europe, Middle East, and Africa segment’s revenues came in at $667.8 million, up 8% year over year on a reported basis and organically, missing our estimate of $661.2 million. Bookings were up 9% year over year on a reported basis and organically, at $637 million.Revenues from the Asia Pacific segment were down 21% year over year on a reported basis and organically to $298.5 million, missing our estimate of $437.5 million. Bookings of $279 million decreased 30% on a reported basis and 31% organically.Operating Margin PerformanceAdjusted operating income was $56.9 billion, down 31% year over year. Adjusted operating margin squeezed 290 basis points to 19.1%.Key Balance Sheet and Cash Flow FiguresTrane ended the quarter with a cash balance of $2.3 billion compared with $959 million in the previous quarter. The debt balance was $5.3 billion, flat with the previous quarter. The company generated $1.3 billion of cash from operating activities and free cash of $1.2 billion in the quarter.2024 GuidanceThe company raised its 2024 guidance. It currently expects revenues to increase 11% compared with the previous expectation of 10% growth.Adjusted EPS is expected to be around $11.1 compared with the previous anticipation of $10.8.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed an upward trend in fresh estimates.VGM ScoresAt this time, Trane Technologies has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Trane Technologies has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.Performance of an Industry PlayerTrane Technologies is part of the Zacks Building Products - Air Conditioner and Heating industry. Over the past month, Watsco (WSO), a stock from the same industry, has gained 17.3%. The company reported its results for the quarter ended September 2024 more than a month ago.Watsco reported revenues of $2.16 billion in the last reported quarter, representing a year-over-year change of +1.6%. EPS of $4.22 for the same period compares with $4.35 a year ago.For the current quarter, Watsco is expected to post earnings of $2.07 per share, indicating a change of +0.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -2.7% over the last 30 days.Watsco has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. 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