Carrier Global (CARR) AI Stock Analysis

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Carrier Global

(NYSE:CARR)

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Neutral 69 (OpenAI - 5.2)

Rating:69Neutral

Price Target:

$62.00

▲(11.41% Upside)

Action:ReiteratedDate:02/05/26

The score is driven primarily by solid financial fundamentals (healthy margins and strong recent free cash flow) and supportive 2026 guidance/capital returns. These positives are tempered by high business volatility, near-term end-market weakness highlighted on the call, and technically overextended momentum; valuation is also on the expensive side relative to the modest dividend yield.

Positive Factors

Strong free cash flow

Carrier's TTM operating cash flow (~$2.49B) and free cash flow (~$2.09B) provide durable internal funding for capex, R&D, buybacks and dividends. Reliable FCF supports capital returns and strategic investments, reducing dependence on external financing across multi-quarter cycles.

Commercial HVAC & aftermarket strength

Sustained double-digit growth in commercial HVAC and aftermarket, high attachment rates (~60%) and >110,000 service-covered chillers create recurring, higher-margin revenue. A growing installed base underpins parts, service and retrofit demand, making revenue and margin streams more resilient over time.

Rapidly expanding data center business

Data center revenue ramp to ~ $1B with orders up 5x reflects successful product innovation (water-cooled chillers, Maglev air-cooled CDUs) and share gains. This secular, high-growth end market diversifies Carrier away from cyclical residential demand and can raise long-term revenue visibility and margins.

Negative Factors

Volatile revenue and cash flow

Carrier exhibits material year-to-year swings in revenue, earnings and cash flow, including a weak 2024. Such volatility complicates forecasting, raises the risk of margin erosion in downturns and makes capital-allocation choices (buybacks, M&A, reinvestment) more sensitive to timing and working-capital swings.

Severe short-cycle residential weakness & China softness

Residential and light-commercial markets are deeply cyclical: CSA residential volumes down ~40% and China sales down ~20% in Q4. These short-cycle headwinds drive margin under-absorption, elevated decremental margins and make near-term profitability and working-capital performance highly sensitive to regional macro trends.

Sizable outstanding debt

Although leverage has improved, total debt of roughly $12.3B and meaningful remaining leverage limit financial flexibility if end markets deteriorate. High absolute debt increases sensitivity to slower cash conversion and constrains the firm's ability to pursue opportunistic investments or absorb prolonged cyclical weakness.

Carrier Global (CARR) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$46.49B

Dividend Yield1.65%

Average Volume (3M)7.22M

Price to Earnings (P/E)29.7

Beta (1Y)1.35

Revenue Growth-7.93%

EPS Growth-35.00%

CountryUS

Employees48,000

SectorIndustrials

Sector Strength72

IndustryConstruction

Share Statistics

EPS (TTM)0.34

Shares Outstanding835,843,900

10 Day Avg. Volume6,067,251

30 Day Avg. Volume7,221,622

Financial Highlights & Ratios

PEG Ratio-0.41

Price to Book (P/B)3.21

Price to Sales (P/S)2.04

P/FCF Ratio26.13

Enterprise Value/Market Cap1.24

Enterprise Value/Revenue2.65

Enterprise Value/Gross Profit10.23

Enterprise Value/Ebitda18.24

Forecast

1Y Price Target

$70.00

Price Target Upside25.79% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering11

EPS Forecast (FY)2.79

Revenue Forecast (FY)$21.97B

Carrier Global Business Overview & Revenue Model

Company DescriptionCarrier Global Corporation provides heating, ventilating, and air conditioning (HVAC), refrigeration, fire, security, and building automation technologies worldwide. It operates through three segments: HVAC, Refrigeration, and Fire & Security. The HVAC segment provides products, controls, services, and solutions to meet the heating, cooling, and ventilation needs of residential and commercial customers. Its products include air conditioners, heating systems, controls, and aftermarket components, as well as aftermarket repair and maintenance services and building automation solutions. The Refrigeration segment offers transport refrigeration and monitoring products and services, as well as digital solutions for trucks, trailers, shipping containers, intermodal applications, food retail, and warehouse cooling; and commercial refrigeration solutions, such as refrigerated cabinets, freezers, systems, and controls. The Fire & Security segment provides various residential, commercial, and industrial technologies, including fire, flame, gas, smoke, and carbon monoxide detection; portable fire extinguishers; fire suppression systems; intruder alarms; access control systems; video management systems; and electronic controls. Its other fire and security service offerings comprise audit, design, installation, and system integration, as well as aftermarket maintenance and repair and monitoring services. The company offers its products under the Autronica, Det-Tronics, Edwards, Fireye, GST, Kidde, LenelS2, Marioff, Onity, and Supra; Carrier, Automated Logic, Bryant, CIAT, Day & Night, Heil, NORESCO, and Riello; and Carrier Commercial Refrigeration, Carrier Transicold, and Sensitech brands. The company was incorporated in 2019 and is headquartered in Palm Beach Gardens, Florida.

How the Company Makes MoneyCarrier primarily makes money by selling equipment and related lifecycle services across its operating segments. (1) HVAC equipment sales: Revenue is generated from manufacturing and selling residential HVAC products (e.g., furnaces, air conditioners, heat pumps) and commercial HVAC systems (e.g., chillers, air-handling equipment, packaged systems). These sales typically flow through distributors, dealers/contractors, and in some cases direct-to-commercial customers on project-based installations. (2) Refrigeration sales: Carrier earns revenue from commercial refrigeration equipment and systems used in cold chain and retail/transport refrigeration, as well as associated controls/monitoring offerings; revenue comes from both original equipment and aftermarket needs. (3) Aftermarket/service and maintenance: A meaningful portion of revenue comes from services tied to the installed base—maintenance contracts, repairs, parts, upgrades/retrofits, and system monitoring—providing recurring or repeat revenue beyond the initial equipment sale. (4) Building solutions (controls, fire & security): Revenue is generated from selling and installing building automation controls and fire/security products and systems, plus ongoing inspection, monitoring, and service where applicable. Key earnings drivers typically include the size of the installed base (supporting parts and service demand), replacement/upgrade cycles (including energy-efficiency and regulatory-driven upgrades), new construction and renovation activity, and pricing/product mix; specific partnership details not publicly disclosed here are null.

Carrier Global Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Shows how much each business segment contributes to total sales, indicating the company's diversification and potential growth areas.

Chart InsightsCarrier Global's HVAC segment is experiencing robust growth, driven by strategic initiatives and strong demand in Climate Solutions and Transportation, as highlighted in the latest earnings call. Despite challenges in the light commercial segment and Asia, the company is mitigating tariff impacts through pricing strategies. The Refrigeration and Fire and Security segments show mixed performance, with notable declines in recent quarters. Carrier's increased EPS guidance and strong cash flow generation underscore its resilience and strategic focus, positioning it well for continued growth in 2025.

Data provided by:

The Fly

Carrier Global Earnings Call Summary

Earnings Call Date:Feb 05, 2026

(Q4-2025)

% Change Since: |

Next Earnings Date:Apr 23, 2026

Earnings Call Sentiment Neutral

The call highlights clear strategic progress: strong cash generation and capital returns, notable strength and rapid expansion in data centers, sustained double-digit growth in commercial HVAC and aftermarket, and significant productivity/cost actions expected to drive margin improvement. However, these positives are offset in the near term by substantial weakness in short-cycle residential and light commercial markets—particularly in the U.S. and China—which drove steep Q4 volume and profit declines, elevated decremental margins, and inventory/manufacturing tradeoffs. Guidance for 2026 is cautiously constructive (EPS and operating profit growth alongside continued investments), but it depends on macro stability and recovery in short-cycle markets.

Q4-2025 Updates

Positive Updates

Q4 and Full-Year Cash Generation & Capital Returns

Q4 reported sales of $4.8B, adjusted operating profit of $455M and adjusted EPS of $0.34. Q4 free cash flow ~ $900M and full-year free cash flow ~ $2.1B. Distributed $3.7B to shareholders in 2025 via buybacks and dividends.

Robust Orders and Commercial Momentum

Total company orders up ~15–16% in Q4 with commercial HVAC orders up >45% globally. CSA commercial orders rose ~80% in Q4 and applied orders within CSA commercial more than tripled year-over-year; light commercial orders up ~70%.

Data Center Business Rapid Expansion

Data center business grown to around $1B in revenue; CSA data center orders up more than 5x in Q4. Management expects data center revenue to grow ~50% in 2026 and sees meaningful share gains (water-cooled chiller share ~4x since spin) with new CDUs and Maglev air-cooled chillers in the portfolio.

Commercial HVAC and Aftermarket Strength

Fifth consecutive year of double-digit growth in commercial HVAC; global commercial HVAC up ~14% for the year. Aftermarket up double-digits for the fifth consecutive year; chillers connected rose from ~17,000 to >70,000, CSA attachment rate near 60%, and global service-covered chillers ~110,000. Modifications/upgrades sales up ~20%.

Strong Transportation & CST Performance

Transportation segment organic sales +10% in Q4 with segment margins expanding ~30 bps. Container/CST businesses show scale with >220,000 paid link subscriptions (110,000 on containers) and commercial partnerships with six of the world’s top 10 shipping lines, supporting recurring revenue opportunities.

Productivity and Cost Actions

Aggressive cost, pricing and productivity actions offset tariffs and drove strong material productivity. Management expects cost actions executed into 2025 to deliver >$100M savings in 2026 and cited productivity including cost actions of roughly $400M as a benefit in the 2026 profit bridge.

2026 Financial Framework and Capital Plan

2026 guidance: flat to low mid-single digit organic growth, reported sales ~ $22B, adjusted operating profit ~ $3.4B, adjusted EPS ~ $2.80 (up high single digits), free cash flow ~ $2B (H2 weighted) and planned share repurchases of ~ $1.5B.

Strategic Product & Go-to-Market Progress

Expanded portfolio and capability investments (chiller manufacturing, technicians, HEMS/Carrier Energy trials, SystemsProphy installer expansion) with planned market launch for integrated heat pump+battery HEMS and a plan to double qualified Prophy installers in 2026.

Negative Updates

Severe CSA Residential and Light Commercial Weakness

CSA segment had a difficult quarter: organic sales down ~17% in Q4. CSA residential sales were down ~40% (volume down >40%) and light commercial sales declined ~20%. CSA segment operating margin fell to just under ~9%, a decline of ~10 percentage points year-over-year, driven by lower sales and severe under-absorption as manufacturing output was less than half of prior-year Q4.

Significant YoY Profitability Decline in Q4

Adjusted operating profit declined ~33% year-over-year in Q4, primarily reflecting lower organic sales, unfavorable business mix and much lower manufacturing output. Decremental margin dynamics were elevated (management noted ~50% decremental excluding currency effects), indicating high sensitivity of profit to volume declines.

China and APAC Short-Cycle Pressure

China sales down ~20% overall in Q4 with residential and light commercial in China down ~30%, contributing to a 9% sales decline in Climate Solutions Asia Pacific. Management expects continued softness in China and sees AME (CSAME) approximately flat for 2026 with China down high single digits.

Short-Cycle Markets Softer Than Expected

Short-cycle residential and light commercial markets softened more than expected in H2 2025, causing total-company organic sales to be down ~1% for the full year and Q4 organic decline of ~9%. Management expects CSA residential industry units down 10–15% for the year and plans for a difficult first half (CSA resi down 20–25% in Q1).

Inventory & Manufacturing Tradeoffs Increased Balance Sheet Stock

Field inventories were purposefully reduced (residential field inventories down ~30% YoY and light commercial distributor inventories down ~25%), but company inventory on the balance sheet was up ~8% YoY because US residential plants were kept running at minimal levels to avoid cold starts, resulting in several hundred million dollars of extra inventory that needs to be liquidated through 2026.

Commodity, Tariff and Price Headwinds

Management disclosed a ~$60M headwind from copper, steel and aluminum (net of hedges) for 2026 and noted ongoing tariff risks; pricing realization is expected to be low single digits (~1–3%), partially offsetting inflation/commodity cost pressures.

Near-Term Guidance Risk and Seasonal Weakness

Q1 2026 guidance assumes company revenues of ~ $5B with organic revenue down high single digits and CSA residential down >20%; free cash flow is expected to be a use of a few hundred million in Q1. Guidance assumes no change to macro conditions and includes a ~$350M revenue headwind from the planned exit of Riello, creating sensitivity to macro or execution volatility.

Company Guidance

Carrier guided 2026 reported sales of about $22 billion with flat to low‑mid single‑digit organic growth (including a roughly $350 million revenue headwind from the Riello exit); the company expects adjusted operating profit of about $3.4 billion, adjusted EPS of ~ $2.80 (up high‑single digits, including roughly $0.15 from higher operating profit), free cash flow of ~ $2.0 billion (second‑half weighted), and ~$1.5 billion of share repurchases. Management expects ~40% of the portfolio (commercial HVAC and aftermarket) to grow double‑digits, data centers to be up ~50% (after growing to ~ $1.0 billion in 2025), price realization in the low single digits, productivity/cost actions contributing roughly $400 million (with over $100 million of savings flowing into 2026) offsetting a volume/mix headwind (~$100 million), and a commodity headwind of about $60 million (around 50% blocked). They forecast Q1 revenue of ~ $5.0 billion with organic revenue down high‑single digits (CSA residential down >20%), Q1 operating margin ~10%, Q1 adjusted EPS ~ $0.50 (benefiting from a discrete 0% tax item), and a modest free cash flow use of a few hundred million.

Carrier Global Financial Statement Overview

Summary

Solid profitability and strengthening leverage profile, supported by strong recent operating cash flow (~$2.49B) and free cash flow (~$2.09B). The main constraint is meaningful year-to-year volatility in revenue, earnings, and cash flow (notably weak 2024 cash flow), which raises sustainability risk.

Income Statement

Positive

TTM (Trailing-Twelve-Months) revenue softened (-1.41%), but profitability remains solid with ~27% gross margin and ~18% net margin. Over the last several years, revenue has been volatile (periods of growth and decline), and margins have generally held in a healthy range. A key watch-out is earnings volatility (net income swung sharply in 2024 versus other years), which raises questions about how repeatable recent profit levels are.

Balance Sheet

Positive

Leverage looks manageable and improving: debt-to-equity is ~0.85 in TTM (Trailing-Twelve-Months), down meaningfully from earlier years when it was materially higher. Equity has also grown versus 2020–2023, supporting balance-sheet resilience. Offsetting this, total debt remains sizable (~$12.3B), so the company is still meaningfully levered and could be more exposed if operating conditions weaken.

Cash Flow

Positive

Cash generation is a clear strength in TTM (Trailing-Twelve-Months): operating cash flow (~$2.49B) and free cash flow (~$2.09B) are strong, with a large free-cash-flow rebound versus 2024. Free cash flow is also reasonably supported by earnings (about 70% of net income). The main weakness is volatility—2024 showed very weak operating and free cash flow versus other years, indicating working-capital or timing swings that can make cash conversion less predictable.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	21.75B	22.49B	18.95B	17.29B	20.61B
Gross Profit	5.63B	6.02B	5.17B	4.30B	6.01B
EBITDA	2.79B	3.56B	2.70B	2.29B	2.91B
Net Income	1.49B	5.60B	1.35B	3.53B	1.66B
Balance Sheet
Total Assets	37.19B	37.40B	32.82B	26.09B	26.17B
Cash, Cash Equivalents and Short-Term Investments	1.55B	3.97B	9.85B	3.52B	2.99B
Total Debt	12.67B	12.71B	14.63B	9.37B	10.22B
Total Liabilities	23.06B	23.01B	23.82B	18.01B	19.08B
Stockholders Equity	13.80B	14.08B	8.68B	7.76B	6.77B
Cash Flow
Free Cash Flow	1.70B	44.00M	2.17B	1.43B	1.89B
Operating Cash Flow	2.09B	563.00M	2.61B	1.74B	2.24B
Investing Cash Flow	-343.00M	-2.02B	-660.00M	1.75B	-692.00M
Financing Cash Flow	-4.67B	-4.64B	4.61B	-2.93B	-1.56B

Carrier Global Technical Analysis

Technical Analysis Sentiment

Negative

Last Price55.65

Price Trends

50DMA

59.56

Negative

100DMA

57.14

Negative

200DMA

62.00

Negative

Market Momentum

MACD

-1.04

Positive

RSI

32.74

Neutral

STOCH

11.80

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CARR, the sentiment is Negative. The current price of 55.65 is below the 20-day moving average (MA) of 61.58, below the 50-day MA of 59.56, and below the 200-day MA of 62.00, indicating a bearish trend. The MACD of -1.04 indicates Positive momentum. The RSI at 32.74 is Neutral, neither overbought nor oversold. The STOCH value of 11.80 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CARR.

Carrier Global Risk Analysis

Carrier Global disclosed 35 risk factors in its most recent earnings report. Carrier Global reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Carrier Global Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TT	78 Outperform	$93.49B	29.82	36.17%	0.95%	8.58%	20.37%
CSL	77 Outperform	$13.96B	18.48	36.69%	1.28%	0.14%	3.88%
JCI	70 Outperform	$79.67B	36.04	23.52%	1.27%	-10.19%	100.65%
CARR	69 Neutral	$46.49B	29.70	10.50%	1.65%	-7.93%	-35.00%
LII	67 Neutral	$16.74B	29.73	78.89%	0.96%	3.77%	12.46%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
AAON	58 Neutral	$6.84B	57.78	12.63%	0.53%	8.77%	-47.50%

* Industrials Sector Average

Performance Comparison

CARR

Carrier Global

55.65

-11.02

-16.53%

AAON

Aaon

83.90

1.52

1.84%

CSL

Carlisle Companies

341.40

2.56

0.76%

Trane Technologies

422.40

74.67

21.47%

JCI

Johnson Controls

130.16

49.88

62.12%

LII

Lennox International

480.96

-104.12

-17.80%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Feb 05, 2026