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Carrier Global Corp. (CARR)
NYSE:CARR
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Carrier Global
(NYSE:CARR)
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Rating:69Neutral
Price Target:
$70.00
â–²(9.14% 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 generation
Sustained high operating and free cash flow provides durable self‑funding for buybacks, dividends, capex and R&D. This cash conversion supports return of capital and reinvestment in product and service expansion, increasing long‑term optionality despite past timing volatility.
Recurring aftermarket & commercial HVAC strength
Large installed base, rising attachment/connectivity rates and repeat service revenue create predictable, higher‑margin annuity streams. This recurring aftermarket cash flow and strong commercial HVAC momentum smooths cyclicality from new equipment sales and supports sustainable margin profiles.
Rapidly expanding data center business
Exposure to the fast‑growing data center segment diversifies revenue away from cyclical residential markets. Product innovation (CDUs, maglev chillers) and accelerating share gains position Carrier in a structural growth market with potential for higher unit economics and margin expansion.
Negative Factors
Large exposure to short‑cycle residential markets
Heavy exposure to short‑cycle residential and light commercial demand makes top‑line and manufacturing utilization sensitive to housing and regional cycles (notably China). Prolonged weakness can depress volumes, under‑absorb fixed costs, and force margin erosion over multiple quarters.
High profit sensitivity to volume declines
Elevated decremental margins indicate costs do not flex quickly with revenue, so modest volume drops translate into disproportionate profit declines. This structural sensitivity increases earnings and cash‑flow volatility, complicating planning and capital allocation during downturns.
Material absolute debt burden remains sizable
While leverage metrics have improved, a $12.3B debt stock leaves the company exposed if cyclical weakness persists. Interest costs, refinancing risk or covenant constraints could limit flexibility for opportunistic investments or extend recovery time after demand troughs.
Carrier Global (CARR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$53.77B
Dividend Yield1.65%
Average Volume (3M)8.11M
Price to Earnings (P/E)36.8
Beta (1Y)1.31
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. Volume5,853,636
30 Day Avg. Volume8,108,666
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 Cap1.20
Enterprise Value/Revenue2.98
Enterprise Value/Gross Profit11.49
Enterprise Value/Ebitda20.49
Forecast
1Y Price Target
$70.36Price Target Upside9.70% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)2.8
Revenue Forecast (FY)$22.03B
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 generates revenue primarily through the sale of its diverse product offerings across its three main business segments: HVAC, Refrigeration, and Fire & Security. The HVAC segment is a major contributor, providing products like residential and commercial air conditioning systems, heating units, and ventilation solutions. The Refrigeration segment includes commercial refrigeration systems and services, catering to food retail and cold chain logistics. The Fire & Security segment offers fire detection systems, security solutions, and monitoring services. Additionally, Carrier benefits from recurring revenue through maintenance services and aftermarket parts. Strategic partnerships with distributors, contractors, and technology firms enhance its market reach and contribute to earnings. The company's commitment to sustainability and energy-efficient solutions also aligns with growing market trends, providing additional avenues for growth.
Carrier Global Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows how much each business segment contributes to total sales, indicating the company's diversification and potential growth areas.
Shows how much each business segment contributes to total sales, indicating the company's diversification and potential growth areas.
Data provided by:
The Fly
The FlyCarrier 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
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.71
Positive
Balance Sheet
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.74
Positive
Cash Flow
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.78
Positive
| 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
Positive
64.14
Price Trends
57.31
Positive
56.73
Positive
62.86
Positive
Market Momentum
2.27
Positive
59.96
Neutral
38.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CARR, the sentiment is Positive. The current price of 64.14 is above the 20-day moving average (MA) of 62.37, above the 50-day MA of 57.31, and above the 200-day MA of 62.86, indicating a bullish trend. The MACD of 2.27 indicates Positive momentum. The RSI at 59.96 is Neutral, neither overbought nor oversold. The STOCH value of 38.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $101.69B | 35.40 | 36.86% | 0.95% | 8.58% | 20.37% | |
77 Outperform | $16.58B | 23.65 | 35.05% | 1.28% | 0.14% | 3.88% | |
69 Neutral | $53.77B | 36.84 | 10.44% | 1.65% | -7.93% | -35.00% | |
69 Neutral | $85.37B | 26.24 | 13.15% | 1.27% | -10.19% | 100.65% | |
67 Neutral | $19.28B | 24.33 | 78.10% | 0.96% | 3.77% | 12.46% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $8.35B | 84.91 | 12.08% | 0.53% | 8.77% | -47.50% |
* Industrials Sector Average
CARR
Carrier Global
64.14
-1.47
-2.23%
AAON
Aaon
102.30
2.69
2.70%
CSL
Carlisle Companies
409.02
80.56
24.52%
TT
Trane Technologies
467.12
123.53
35.95%
JCI
Johnson Controls
143.79
61.02
73.73%
LII
Lennox International
561.01
-44.47
-7.34%
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.