Is Trane Technologies Plc overvalued or undervalued?

As of 24 October 2025, Trane Technologies Plc's valuation grade has moved from fair to expensive, indicating a shift towards overvaluation. The company appears overvalued based on its P/E ratio of 38, which is significantly higher than the industry average P/E of approximately 35.38, as well as its EV to EBITDA ratio of 27.03 compared to peers like Parker-Hannifin Corp. at 28.77 and Applied Materials, Inc. at 34.21. Additionally, the PEG ratio of 1.37 suggests that the stock may not be growing fast enough to justify its current price.
In comparison to its peers, Trane Technologies Plc's valuation metrics indicate it is less attractive than Lam Research Corp., which has a P/E of 57.14, yet it is more favorable than GE Aerospace, which is deemed very expensive with a P/E of 136.79. Notably, Trane's stock has outperformed the S&P 500 over the past three years, returning 189.16% compared to the index's 78.85%, but it has lagged behind over the past year, with a return of 8.48% versus the S&P 500's 16.90%.