Modine Manufacturing Company’s MOD HVAC Technologies segment faced margin pressure in fiscal 2026 due to an unfavorable product mix, elevated costs associated with integrating recent acquisitions and weather-related disruptions. Severe weather on the East Coast and in the Southern U.S. resulted in significant production downtime during the fourth quarter.
Despite these near-term challenges, the company remains optimistic about the segment’s outlook. The commercial HVAC business acquired through Scott Springfield is expected to rebound strongly in fiscal 2027 after a difficult year affected by tariff-related headwinds. Modine projects Commercial HVAC sales growth of 5% to 10% in fiscal 2027, supported by accelerating demand for its heating and indoor air quality products, as well as continued mid-single-digit growth in its coils business.
Modine’s recent acquisitions, AbsolutAire, L.B. White and Climate by Design, contributed $119 million in additional revenues during fiscal 2026. Beyond boosting sales, these acquisitions expanded Modine’s product portfolio and provided access to new end markets and distribution channels. The company expects the HVAC segment’s performance to improve beginning in the second quarter of fiscal 2027, as the company benefits from a full year of ownership of these acquired businesses. MOD carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
HVAC Growth Drivers for Modine’s Competitors
In the first quarter of 2026, Trane Technologies plc’s TT Commercial HVAC business delivered strong results, with Americas bookings reaching a record level, up about 40% year over year. Trane’s growth was fueled by robust demand for applied solutions. Trane’s Americas and EMEA backlog increased approximately $2.7 billion from year-end 2025, supported in part by the acquisition of Stellar Energy and continued momentum in data center cooling projects.
Carrier Global Corporation CARR is seeing robust momentum in its Commercial HVAC business. In the first quarter, Carrier Global's total orders increased 11% year over year, driven by a 35% rise in global HVAC orders. Carrier Global also highlighted ongoing discussions related to data center projects in China and expects to secure additional Commercial HVAC opportunities in that market going forward.
MOD’s Price Performance, Valuation & Estimates
MOD has outperformed the Zacks Automotive-Original Equipment industry. Modine’s shares have rallied 98.1% compared to the industry’s growth of 2.2% in the last six months.
Image Source: Zacks Investment Research
From a valuation perspective, MOD appears overvalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 3.47, higher than the industry’s 2.26.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MOD’s fiscal 2026 and 2027 EPS has moved up 50 cents and $1.10, respectively, in the past 30 days.
Image Source: Zacks Investment Research
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Modine Manufacturing Company (MOD): Free Stock Analysis Report
Trane Technologies plc (TT): Free Stock Analysis Report
Carrier Global Corporation (CARR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).