Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Enterprise Value (EV)
- Enterprise Value to FCFF (EV/FCFF)
- Capital Asset Pricing Model (CAPM)
- Current Ratio since 2005
- Total Asset Turnover since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
- Aggregate Accruals
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Current Valuation Ratios
Trane Technologies plc, current price multiples
| Trane Technologies plc | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | Capital Goods | Industrials | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||
| Current share price (P) | |||||||||||||
| No. shares of common stock outstanding | |||||||||||||
| Growth rate (g) | |||||||||||||
| Earnings per share (EPS) | |||||||||||||
| Next year expected EPS | |||||||||||||
| Operating profit per share | |||||||||||||
| Sales per share | |||||||||||||
| Book value per share (BVPS) | |||||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||||
| Price to earnings (P/E) | |||||||||||||
| Price to next year expected earnings | |||||||||||||
| Price-earnings-growth (PEG) | |||||||||||||
| Price to operating profit (P/OP) | |||||||||||||
| Price to sales (P/S) | |||||||||||||
| Price to book value (P/BV) | |||||||||||||
Based on: 10-K (reporting date: 2022-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Trane Technologies plc, historical price multiples
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
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).
- Price to earnings (P/E) ratio
- The P/E ratio exhibited a generally increasing trend from 2018 through 2020, starting at 18.78 and rising significantly to 40.64 in 2020. This sharp increase suggests heightened market expectations for earnings growth or possibly temporary earnings decline in that year. Subsequently, the P/E ratio decreased to around 25.75 in 2021 and slightly declined further to 23.88 in 2022, indicating a moderation in market valuation relative to earnings after the peak in 2020.
- Price to operating profit (P/OP) ratio
- The P/OP ratio followed a similar pattern to the P/E ratio, with a rise from 13.1 in 2018 to a peak of 22.67 in 2020. This suggests investors were willing to pay more for operating profit during this period. The ratio then declined to 18.12 in 2021 and slightly lower to 17.34 in 2022, reflecting a reduction in valuation multiples against operating profit in recent years compared to the 2020 peak.
- Price to sales (P/S) ratio
- The P/S ratio also increased steadily from 1.6 in 2018 to 2.79 in 2020, indicating growth in the market price relative to sales revenue. Following 2020, the P/S ratio decreased marginally to 2.59 in 2021 but held relatively stable around 2.62 in 2022. This stability suggests consistent market valuation relative to sales despite some fluctuations.
- Price to book value (P/BV) ratio
- The P/BV ratio demonstrated continual growth throughout the entire period, starting at 3.58 in 2018 and rising steadily each year to reach 6.89 in 2022. This persistent increase indicates a rising market valuation of the company's equity relative to its book value over time, which may reflect strong investor confidence or an increase in intangible assets not reflected on the balance sheet.
Price to Earnings (P/E)
Trane Technologies plc, historical P/E calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net earnings attributable to Trane Technologies plc (in thousands) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| P/E Ratio, Sector | ||||||
| Capital Goods | ||||||
| P/E Ratio, Industry | ||||||
| Industrials | ||||||
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).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
EPS = Net earnings attributable to Trane Technologies plc ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Trane Technologies plc Annual Report.
4 2022 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price exhibits an overall upward trend over the five-year period. Starting at 103.75 US dollars at the end of 2018, it increased steadily each year, reaching 183.14 US dollars by the end of 2022. The growth accelerated particularly after 2020, indicating increased market valuation.
- Earnings Per Share (EPS)
- EPS showed moderate growth from 5.52 US dollars in 2018 to 5.92 US dollars in 2019. However, there was a significant decline in 2020 to 3.59 US dollars, likely reflecting challenges during that year. Subsequently, EPS rebounded strongly in 2021, reaching 6.09 US dollars, and continued to improve to 7.67 US dollars in 2022, surpassing previous peaks and demonstrating recovery and growth in profitability.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio fluctuated considerably throughout the period. It began at 18.78 in 2018, increased notably to 24.5 in 2019, and peaked at 40.64 in 2020, indicating higher market expectations or reduced earnings. The ratio then declined to 25.75 in 2021 and further to 23.88 in 2022. This pattern suggests a normalization of valuation metrics as earnings improved after 2020.
Price to Operating Profit (P/OP)
Trane Technologies plc, historical P/OP calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Operating income (in thousands) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| P/OP Ratio, Sector | ||||||
| Capital Goods | ||||||
| P/OP Ratio, Industry | ||||||
| Industrials | ||||||
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).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Trane Technologies plc Annual Report.
4 2022 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price demonstrated a consistent upward trend across the analyzed periods. Starting at $103.75 at the end of 2018, it increased steadily each year, reaching $183.14 by the end of 2022. This reflects an approximate 76.5% growth over the five-year span.
- Operating Profit per Share (OPPS)
- The operating profit per share exhibited variability over the years. It rose from $7.92 in 2018 to $8.46 in 2019, which showed positive growth. However, in 2020, there was a notable decline to $6.43. This dip was followed by a recovery in 2021, with OPPS increasing to $8.66. The upward momentum continued in 2022, reaching $10.56, marking the highest value in the given timeframe.
- Price to Operating Profit Ratio (P/OP)
- The price to operating profit ratio experienced fluctuations corresponding with changes in share price and operating profit per share. Starting at a relatively low level of 13.1 in 2018, the ratio increased significantly to 17.13 in 2019 and peaked at 22.67 in 2020. This peak suggests that the share price was relatively high compared to operating profit, potentially reflecting market optimism or overvaluation during that year. Subsequently, the ratio declined to 18.12 in 2021 and further to 17.34 in 2022, indicating a moderation in valuation multiples despite the increasing share price and improving operating profit.
- Overall Observations
- The data indicates a general growth in shareholder value as evidenced by the rising share price over the period. The dip in operating profit per share in 2020 could be attributed to external or internal factors impacting profitability, but the subsequent recovery and surpassing of previous levels suggests resilience and positive operational performance. Meanwhile, the P/OP ratio's fluctuations highlight changing investor sentiment or market conditions, with a notable peak in 2020 followed by a normalization trend. The combined analysis reflects a company that experienced some challenges in 2020 but managed to improve profitability and maintain increasing market valuation through 2022.
Price to Sales (P/S)
Trane Technologies plc, historical P/S calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net revenues (in thousands) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| P/S Ratio, Sector | ||||||
| Capital Goods | ||||||
| P/S Ratio, Industry | ||||||
| Industrials | ||||||
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).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
Sales per share = Net revenues ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Trane Technologies plc Annual Report.
4 2022 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited a consistent upward trend over the examined period. Starting at 103.75 US dollars at the end of 2018, it increased each year, reaching 183.14 US dollars by the end of 2022. This represents a substantial growth, indicating positive market sentiment and potentially strong company performance.
- Sales Per Share
- Sales per share showed some fluctuations during the period. After an increase from 64.7 US dollars in 2018 to 69.63 US dollars in 2019, there was a noticeable decline to 52.24 US dollars in 2020. This drop may reflect external challenges or operational changes during that year. However, sales per share partially recovered afterward, rising to 60.53 US dollars in 2021 and further to 69.81 US dollars in 2022, nearing the peak levels observed in 2019.
- Price-to-Sales Ratio (P/S)
- The price-to-sales ratio followed a general increasing pattern from 2018 through 2020, moving from 1.6 to 2.79. The peak in 2020 occurred despite the decline in sales per share, suggesting that share prices had increased at a relatively higher pace. In 2021, the ratio decreased slightly to 2.59, and in 2022 it remained fairly stable at 2.62. This stability in the P/S ratio, coupled with the recovery in sales per share, could indicate a balancing between market valuation and company sales performance.
Price to Book Value (P/BV)
Trane Technologies plc, historical P/BV calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Total Trane Technologies plc shareholders’ equity (in thousands) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| P/BV Ratio, Sector | ||||||
| Capital Goods | ||||||
| P/BV Ratio, Industry | ||||||
| Industrials | ||||||
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).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
BVPS = Total Trane Technologies plc shareholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Trane Technologies plc Annual Report.
4 2022 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
- Share price
- The share price has shown a consistent upward trend over the observed period. Starting at $103.75 at the end of 2018, it rose significantly to $144.97 by the end of 2019. The increase continued more moderately to $145.71 in 2020, then accelerated in 2021 to $156.97, culminating in a notable rise to $183.14 by the end of 2022. Overall, the share price increased by approximately 76% over the five-year span.
- Book value per share (BVPS)
- In contrast to the share price, the book value per share exhibited a slight declining trend. Beginning at $29.00 in 2018, it increased marginally to $30.48 in 2019 but then decreased each subsequent year to $26.87 in 2020, $26.79 in 2021, and further down to $26.58 in 2022. This represents a decline of about 12.8% from the peak in 2019 to 2022, indicating a gradual reduction in the net asset value per share.
- Price-to-Book Value Ratio (P/BV)
- The P/BV ratio has risen steadily and quite markedly throughout the period. From 3.58 at the end of 2018, it climbed to 4.76 in 2019, then to 5.42 in 2020, followed by 5.86 in 2021, and reached 6.89 in 2022. This progression reflects an increasing market valuation relative to the book value per share, driven primarily by the rising share price coupled with the diminishing book value per share. The ratio's growth indicates that investors are willing to pay a higher premium over the book value as time progresses.
- Overall analysis
- The financial data reveals a clear pattern of growing market confidence as evidenced by the rising share price and P/BV ratio, despite a slight erosion in the underlying book value per share. The divergence between the share price and book value per share suggests that market expectations for future earnings or growth potential are rising, leading to higher valuation multiples. This trend may signal positive investor sentiment about the company’s prospects, although the declining book value per share warrants continued monitoring of the company’s asset base and equity quality.