Price to Book Value (P/BV)
since 2005
Calculation
Trane Technologies plc, P/BV, long-term trends, calculation
| P/BV | = | Share price1, 2, 3 | ÷ | Book value per share1 (BVPS) | BVPS1 | = | Total Trane Technologies plc shareholders’ equity1 (in thousands) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 10, 2023 | 6.89 | = | 183.14 | ÷ | 26.58 | 26.58 | = | 6,088,600 | ÷ | 229,074,725 | |
| Feb 7, 2022 | 5.86 | = | 156.97 | ÷ | 26.79 | 26.79 | = | 6,255,900 | ÷ | 233,538,091 | |
| Feb 9, 2021 | 5.42 | = | 145.71 | ÷ | 26.87 | 26.87 | = | 6,407,700 | ÷ | 238,428,700 | |
| Feb 18, 2020 | 4.76 | = | 144.97 | ÷ | 30.48 | 30.48 | = | 7,267,600 | ÷ | 238,401,033 | |
| Feb 12, 2019 | 3.58 | = | 103.75 | ÷ | 29.00 | 29.00 | = | 7,022,700 | ÷ | 242,168,631 | |
| Feb 12, 2018 | 3.18 | = | 90.91 | ÷ | 28.57 | 28.57 | = | 7,140,300 | ÷ | 249,889,299 | |
| Feb 13, 2017 | 3.20 | = | 81.98 | ÷ | 25.60 | 25.60 | = | 6,643,800 | ÷ | 259,508,972 | |
| Feb 12, 2016 | 2.27 | = | 51.32 | ÷ | 22.65 | 22.65 | = | 5,816,700 | ÷ | 256,847,948 | |
| Feb 13, 2015 | 2.98 | = | 67.69 | ÷ | 22.74 | 22.74 | = | 5,987,400 | ÷ | 263,321,574 | |
| Feb 14, 2014 | 2.30 | = | 58.43 | ÷ | 25.42 | 25.42 | = | 7,068,900 | ÷ | 278,035,707 | |
| Feb 14, 2013 | 2.20 | = | 53.03 | ÷ | 24.12 | 24.12 | = | 7,147,800 | ÷ | 296,317,386 | |
| Feb 21, 2012 | 1.76 | = | 40.99 | ÷ | 23.28 | 23.28 | = | 6,924,300 | ÷ | 297,375,890 | |
| Feb 22, 2011 | 1.91 | = | 46.11 | ÷ | 24.17 | 24.17 | = | 7,964,300 | ÷ | 329,577,804 | |
| Feb 26, 2010 | 1.44 | = | 31.91 | ÷ | 22.12 | 22.12 | = | 7,101,800 | ÷ | 321,072,029 | |
| Mar 2, 2009 | 0.62 | = | 12.99 | ÷ | 20.89 | 20.89 | = | 6,661,400 | ÷ | 318,864,140 | |
| Feb 29, 2008 | 1.44 | = | 41.86 | ÷ | 29.00 | 29.00 | = | 7,907,900 | ÷ | 272,645,080 | |
| Mar 1, 2007 | 2.45 | = | 43.08 | ÷ | 17.56 | 17.56 | = | 5,404,800 | ÷ | 307,801,047 | |
| Mar 1, 2006 | 2.38 | = | 41.96 | ÷ | 17.60 | 17.60 | = | 5,762,000 | ÷ | 327,478,397 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Trane Technologies plc Annual Report.
The valuation of the company based on the price-to-book value (P/BV) ratio exhibits three distinct phases between 2006 and 2023: a period of volatility associated with a market downturn, a steady recovery, and a subsequent aggressive expansion of the valuation premium.
- P/BV Ratio Volatility and Recovery
- The P/BV ratio began at 2.38 in 2006 and experienced a significant contraction, reaching a minimum of 0.62 in 2009. This decline was primarily driven by a sharp decrease in the share price. Following this trough, the ratio recovered to 1.44 in 2010 and maintained a general upward trajectory through 2016, fluctuating between 1.76 and 2.98.
- Accelerated Valuation Expansion
- Starting in 2017, a marked shift in market valuation is observed. The P/BV ratio rose from 3.20 in 2017 to 6.89 by 2023. This represents a significant increase in the premium the market is willing to pay relative to the company's book value, with the ratio more than doubling over this six-year period.
- Share Price vs. Book Value Divergence
- A widening divergence is evident between the share price and the book value per share (BVPS). While the share price grew from 41.96 in 2006 to 183.14 in 2023, the BVPS remained relatively range-bound, moving from 17.60 in 2006 to 26.58 in 2023. Notably, between 2018 and 2023, the BVPS slightly declined from 28.57 to 26.58, while the share price doubled from 90.91 to 183.14.
- Analytical Insight
- The substantial increase in the P/BV ratio in the latter part of the period suggests that the market valuation is increasingly driven by factors beyond tangible assets, such as intangible value, future earnings expectations, or improved capital efficiency, rather than an increase in the company's net asset base.
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Comparison to Competitors
Trane Technologies plc, P/BV, long-term trends, comparison to competitors
| Trane Technologies plc | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | |
|---|---|---|---|---|---|---|---|---|
| Feb 10, 2023 | 6.89 | — | 8.09 | 4.04 | 2.43 | 8.02 | 12.67 | 1.97 |
| Feb 7, 2022 | 5.86 | — | 6.62 | 3.63 | 2.64 | 6.91 | 9.62 | 1.95 |
| Feb 9, 2021 | 5.42 | — | 7.20 | 3.54 | 2.89 | 8.07 | 15.27 | 1.53 |
| Feb 18, 2020 | 4.76 | — | 5.16 | 2.48 | 3.66 | 6.97 | 39.60 | 3.24 |
| Feb 12, 2019 | 3.58 | 674.83 | 5.44 | 2.12 | 3.00 | 5.96 | 61.11 | 2.71 |
| Feb 12, 2018 | 3.18 | 569.92 | 6.98 | 2.06 | 1.96 | 6.44 | — | 3.38 |
| Feb 13, 2017 | 3.20 | 122.80 | 4.42 | 2.19 | 3.47 | 4.79 | 49.61 | 3.22 |
| Feb 12, 2016 | 2.27 | 12.17 | 2.56 | 1.72 | 2.79 | 4.35 | 21.37 | 2.59 |
| Feb 13, 2015 | 2.98 | 12.04 | 3.09 | 2.13 | 2.04 | 4.63 | 17.92 | 3.49 |
| Feb 14, 2014 | 2.30 | 6.50 | 2.96 | 2.15 | 1.96 | 4.25 | 10.65 | 3.14 |
| Feb 14, 2013 | 2.20 | 9.78 | 3.57 | 1.94 | 1.95 | 4.24 | 727.88 | 3.18 |
| Feb 21, 2012 | 1.76 | 16.10 | 5.78 | 2.32 | 1.75 | 4.31 | 28.67 | 3.48 |
| Feb 22, 2011 | 1.91 | 19.33 | 6.02 | 2.47 | 1.86 | 4.26 | 7.56 | 3.65 |
| Feb 26, 2010 | 1.44 | 20.59 | 4.16 | 1.67 | 1.47 | 3.27 | 7.00 | 3.12 |
| Mar 2, 2009 | 0.62 | — | 2.63 | 0.95 | 1.10 | 3.38 | 9.51 | 2.82 |
| Feb 29, 2008 | 1.44 | 7.24 | 5.00 | 2.28 | 2.97 | 4.52 | 4.38 | 3.28 |
| Mar 1, 2007 | 2.45 | 15.15 | 6.33 | 2.88 | 3.17 | 3.94 | 6.23 | 3.92 |
| Mar 1, 2006 | 2.38 | 5.26 | 5.81 | 2.73 | 3.15 | 3.05 | 4.05 | 3.39 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Sector (Capital Goods)
Trane Technologies plc, P/BV, long-term trends, comparison to sector (capital goods)
| Trane Technologies plc | Capital Goods | |
|---|---|---|
| Feb 10, 2023 | 6.89 | 5.31 |
| Feb 7, 2022 | 5.86 | 4.77 |
| Feb 9, 2021 | 5.42 | 5.05 |
| Feb 18, 2020 | 4.76 | 6.91 |
| Feb 12, 2019 | 3.58 | 6.11 |
| Feb 12, 2018 | 3.18 | 5.42 |
| Feb 13, 2017 | 3.20 | 4.64 |
| Feb 12, 2016 | 2.27 | 3.45 |
| Feb 13, 2015 | 2.98 | 3.17 |
| Feb 14, 2014 | 2.30 | 2.85 |
| Feb 14, 2013 | 2.20 | 2.77 |
| Feb 21, 2012 | 1.76 | 2.89 |
| Feb 22, 2011 | 1.91 | 2.90 |
| Feb 26, 2010 | 1.44 | 2.29 |
| Mar 2, 2009 | 0.62 | 1.86 |
| Feb 29, 2008 | 1.44 | 3.46 |
| Mar 1, 2007 | 2.45 | 3.91 |
| Mar 1, 2006 | 2.38 | 3.47 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Industry (Industrials)
Trane Technologies plc, P/BV, long-term trends, comparison to industry (industrials)
| Trane Technologies plc | Industrials | |
|---|---|---|
| Feb 10, 2023 | 6.89 | 5.50 |
| Feb 7, 2022 | 5.86 | 5.44 |
| Feb 9, 2021 | 5.42 | 5.89 |
| Feb 18, 2020 | 4.76 | 6.28 |
| Feb 12, 2019 | 3.58 | 5.96 |
| Feb 12, 2018 | 3.18 | 5.37 |
| Feb 13, 2017 | 3.20 | 4.89 |
| Feb 12, 2016 | 2.27 | 3.68 |
| Feb 13, 2015 | 2.98 | 3.70 |
| Feb 14, 2014 | 2.30 | 3.14 |
| Feb 14, 2013 | 2.20 | 3.06 |
| Feb 21, 2012 | 1.76 | 3.09 |
| Feb 22, 2011 | 1.91 | 3.05 |
| Feb 26, 2010 | 1.44 | 2.43 |
| Mar 2, 2009 | 0.62 | 2.01 |
| Feb 29, 2008 | 1.44 | 3.45 |
| Mar 1, 2007 | 2.45 | 3.75 |
| Mar 1, 2006 | 2.38 | 3.95 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).