Will Trane Technologies (TT) Beat Estimates Again in Its Next Earnings Report?

Have you been looking for a stock that could be well-positioned to continue its earnings streak in its upcoming report? Consider Trane Technologies (TT), which belongs to the Zacks Technology Services industry.

Looking at the last two reports, this manufacturer has seen a strong streak of beating earnings estimates. The company has beaten estimates by an average of 10.09% over the last two quarters.

Trane Technologies was expected to post earnings of $1.64 per share for the last quarter but instead the company reported earnings of $1.94 per share, delivering a surprise of 18.29%. For the previous quarter, the consensus estimate was $2.13 per share when the company actually delivered earnings of $2.17 per share, delivering a surprise of 1.88%.

Given this earnings history, recent estimates for Trane Technologies are moving higher. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the company is positive, which is a great sign of an earnings beat, especially when you combine this metric with its strong Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better deliver a positive surprise almost 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat consensus estimates could be as many as seven.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a revision of the Zacks Consensus definition that is related to revision. The idea is that analysts revising their estimates just before an earnings release have the latest information, which could potentially be more accurate than what they and other contributors to the consensus had previously predicted.

Trane Technologies currently has an Earnings ESP of +1.19%, suggesting that analysts have become bullish on its near-term earnings potential. When we combine this positive Earnings ESP with the stock’s Zacks Rank #2 (Buy), it shows that another beat is likely just around the corner.

In the case of the Earnings ESP indicator, it is important to remember that a negative value reduces its predictive power; however, a negative Earnings ESP value does not mean that profits have not been achieved.

Many companies end up beating consensus EPS estimates, but that may not be the only basis for their stock growth. On the other hand, some stocks can maintain their position even if they end up missing consensus estimates.

For this reason, it is very important to check a company’s Earnings ESP before its quarterly release to increase your chances of success. Make sure you use our Earnings ESP Filter to discover the best stocks to buy or sell before they are released.

Want the latest recommendations from Zacks Investment Research? Today you can download the 7 best stocks for the next 30 days. Click to get this free report

Trane Technologies plc (TT): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research