- Trane had an okay quarter and guidance wasn't bad, though operating leverage will be weak in the first half of 2022.
- The HVAC sector has been hit by concerns about the achievability of 2022 earnings targets and the coming reset in residential replacement sales (about 80% of the residential market).
- Theme rotation could prove to be the bigger challenge, as institutions seem to have moved on from HVAC stocks (for the above reasons, and maybe others as well).
- Trane's valuation is getting pretty interesting, and the long-term case is solid, but I'd like a bigger expected reward to "fight the tape" as it were.
For further details see:
Apparently, It's Not So Hard To Stop A Trane