Carrier Q4 results hit by weak residential markets, distributor destocking

Overview

• Climate solutions provider's Q4 revenue down 6% yr/yr

• Adjusted operating income missed analyst expectations

• Company returned ~$3.7 bln to shareholders via dividends and share repurchases

Outlook

• Carrier expects 2026 adjusted operating profit of ~$3.4 bln

• Company projects 2026 adjusted EPS of ~$2.80

• Carrier forecasts 2026 free cash flow of ~$2 bln

Result Drivers

• COMMERCIAL HVAC GROWTH - Carrier reported nearly 50% increase in Q4 orders for commercial HVAC driven by key data center wins

• AFTERMARKET GROWTH - Carrier's aftermarket business achieved its fifth consecutive year of double-digit growth

• RESIDENTIAL MARKET WEAKNESS - Declines in Q4 sales were driven by weaker residential end-markets and distributor destocking in the Americas

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 15 "strong buy" or "buy", 10 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the electrical components & equipment peer group is "buy"

• Wall Street's median 12-month price target for Carrier Global Corp is $69.00, about 8.6% above its February 4 closing price of $63.55

• The stock recently traded at 22 times the next 12-month earnings vs. a P/E of 20 three months ago

Press Release: ID:nPn27HdsSa

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