Trane Technologies (TT) delivered "drama-free" Q3 results, posting a modest operating beat as strength in its commercial climate-control business helped offset weakness in residential systems, RBC Capital Markets said Thursday in a report.

The residential segment, which account for 15% of revenue, reported a 30% drop in bookings and a 20% decline in sales, with channel inventory rebalancing expected by year-end or early 2026, the report said.

Trane posted record organic bookings of $6 billion, up 13% from a year earlier, and a $7.2 billion backlog, with particular strength in data centers and institutional markets, RBC said.

The company trimmed 2025 adjusted earnings per share guidance to a range of $12.95 to $13.05 and guided Q4 organic growth of 3%, citing soft residential demand, delayed commercial deliveries in the Americas, and weaker transport forecasts.

RBC raised its 2026 EPS estimate by $0.05 to $14.70 and lifted its price target on Trane's stock to $469 from $467, while maintaining its sector perform rating.

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