Risk Reward Update

研报英文原文证据摘录

Risk Reward Update

UpdateM

RiskRisk RewardReward– Trane -TechnologiesTrane TechnologiesPLC (TT.N) PLC (TT.N)

Ride Not Over

PRICE TARGET $565.00 OVERWEIGHT THESIS

Our $565 price target is based on ~32x our blended 2027/28 EPS of $17.77. The multiple ▪We believe TT will be able to sustain HSD

represents a mid 40s % premium vs. the S&P, modestly ahead of current levels, as order organic growth in the coming years,

acceleration argues for rerating. The premium multiple reflects TT's leading position in Data supported by MS bottoms-up build + broad

Center & Advanced Mfg, where we see sustained, elevated demand before follow-on, margin secular tailwinds and coming in ahead of

accretive service revenue, alongside a focus on structural margin expansion. Consensus MSD.

record high backlog, improved $522.11 ▪With

customer paybacks and structural mix

Consensus Price Target Distribution $440.00 $570.00 towards margin accretive services, we MS PT

expect TT to sustain incremental marginsSource: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates

ahead of ~25% Consensus.

▪We view TT as the industry's leading

innovator with it's "relentless reinvestment"

RISK REWARD CHART AND OPTIONS IMPLIED PROBABILITIES (12M) driving improved paybacks for customers &

facilitating accelerated share gains w/

customer focused on energy efficiency.

USD ▪Sustained HSD+ Service growth w/ ability

to invest in digitized service a growing

800 $710.00(+50.42%)$710.00$710.00(+50.42%)(+50.42%) ProbProbProb (>710.00)~6.5%(>710.00)~6.5%(>710.00)~6.5% differentiator vs fragmented regional

competitors.

600 $565.00(+19.70%)$565.00$565.00(+19.70%)(+19.70%)

ProbProbProb (>565.00)~26.9%(>565.00)~26.9%(>565.00)~26.9% Consensus Rating Distribution

$472.00$472.00$472.00 48% Overweight

400 52% Equal-weight