Is Trane Technologies Plc overvalued or undervalued?

As of 29 August 2025, Trane Technologies Plc's valuation grade has moved from expensive to fair, indicating a more favorable assessment of its stock price. The company appears fairly valued based on its current metrics. Key ratios include a P/E ratio of 38, an EV/EBITDA of 27.03, and a PEG ratio of 1.37, which suggest that while the stock is not undervalued, it is also not excessively priced compared to its earnings growth potential.
In comparison to peers, Trane Technologies Plc's P/E ratio is lower than GE Aerospace's 136.79 and higher than Parker-Hannifin Corp.'s 37.22, indicating a competitive positioning within the industry. Additionally, its EV/EBITDA ratio is more favorable than GE Aerospace's 127.43 but less favorable than Lam Research Corp.'s 48.40. Despite recent underperformance in the short term, with a 1-year return of 8.32% compared to the S&P 500's 17.14%, Trane Technologies has shown strong long-term growth with a 3-year return of 158.52%, significantly outpacing the S&P 500's 70.41%.