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Carrier Global Corp Ordinary Shares CARR

Morningstar Rating
$64.74 −1.26 (1.91%)
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Company Report

Carrier Earnings: Solid Q2 Results Despite Lower Sales From Viessmann; Transformation on Track

Narrow-moat-rated Carrier delivered a solid second-quarter performance with low-single-digit percentage organic revenue growth across all three segments and strong margin expansion from the heating, ventilation, and air conditioning and fire and security segments. That said, consolidated revenue fell short of our expectations (and was 5% below the FactSet consensus estimate) as the recently acquired Viessmann Climate Solutions business navigates challenging end markets. Indeed, Viessmann’s second-quarter sales fell 30% year over year, with one third of that decline due to lower solar photovoltaic sales, and management expects Viessmann’s full-year revenue to be down 15%. Weaker-than-anticipated revenue from Viessmann was the primary factor behind Carrier’s downward-revised full-year revenue guidance (now $25.5 billion from $26 billion previously). Nevertheless, guidance for adjusted operating margin (15.5%), adjusted EPS ($2.80-$2.90), and free cash flow ($0.4 billion) is unchanged. Carrier’s 2024 free cash flow will be unusually low due to approximately $2 billion of cash expenses tied to divestiture-related tax payments and transaction costs as well as restructuring.

Price vs Fair Value

CARR is trading at a 658% premium.
Price
$65.99
Fair Value
$14.00
Uncertainty
Medium
1-Star Price
$79.48
5-Star Price
$82.20
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

After separating from United Technologies, Carrier is in full control of its destiny. Organic reinvestment should boost its long-term growth prospects, and cost-cutting initiatives should result in stronger profit margins.

Bears

Carrier's acquisition of Viessmann will add significant leverage and could destroy shareholder value if the target's financial performance falls short of management's goals. Reduced incentives for heat pump purchases in some European markets could be a near-term headwind.

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News

Trading Information

Previous Close Price
$66.00
Day Range
$62.5166.42
52-Week Range
$45.7070.08
Bid/Ask
$64.64 / $64.75
Market Cap
$58.30 Bil
Volume/Avg
4.9 Mil / 4.1 Mil

Key Statistics

Price/Earnings (Normalized)
23.31
Price/Sales
2.49
Dividend Yield (Trailing)
1.14%
Dividend Yield (Forward)
1.15%
Total Yield
1.14%

Company Profile

Carrier Global manufactures heating, ventilation, and air conditioning, refrigeration, and fire and security products. The HVAC business serves both residential and commercial markets (HVAC segment sales mix is 60% commercial and 40% residential). Carrier's refrigeration segment consists of its transportation refrigeration, Sensitech supply chain monitoring, and commercial refrigeration businesses. The firm's fire and security business manufactures fire detection and suppression, access controls, and intrusion detection products. In April 2023, Carrier announced that it plans to divest its fire and security and commercial refrigeration businesses. The firm also acquired Germany-based Viessmann for approximately $13 billion.
Sector
Industrials
Industry
Building Products & Equipment
Stock Style Box
Mid Core
Total Number of Employees
53,000

Competitors

Valuation

Metric
CARR
HON
LII
Price/Earnings (Normalized)
23.3122.5128.04
Price/Book Value
5.148.4633.39
Price/Sales
2.493.843.86
Price/Cash Flow
26.6022.8824.54
Price/Earnings
CARR
HON
LII

Financial Strength

Metric
CARR
HON
LII
Quick Ratio
0.601.180.83
Current Ratio
1.081.661.60
Interest Coverage
9.689.4616.76
Quick Ratio
CARR
HON
LII

Profitability

Metric
CARR
HON
LII
Return on Assets (Normalized)
5.45%9.52%23.18%
Return on Equity (Normalized)
18.14%35.30%237.27%
Return on Invested Capital (Normalized)
9.11%16.16%37.42%
Return on Assets
CARR
HON
LII
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