Balanced Risk/Reward Keeps Carel at Hold Despite Strong Operational Performance

In a report released today, Alessandro Tortora from Mediobanca maintained a Hold rating on Carel Industries SpA, with a price target of €26.00.

Alessandro Tortora has given his Hold rating due to a combination of factors including a solid operational performance but a risk/reward profile that he judges as balanced at current prices. Carel delivered stronger-than-expected organic growth, notably in North America and data center applications, with margins improving and cash generation in the latest quarter beating his projections, supporting only a modest upward revision to earnings estimates.

At the same time, he points to emerging headwinds that limit upside, such as rising raw material costs and heightened geopolitical tensions, especially in areas that could disrupt global supply chains. While he acknowledges an attractive order backlog and continued expansion in key verticals, he notes that cash conversion is expected to normalise and that the company has yet to fully exploit potential value from a more assertive capital allocation strategy, leading him to maintain a Neutral stance with a slightly higher target price.