Carrier Global Initiated with Outperform Rating at Oppenheimer
Oppenheimer started coverage on Carrier Global Corporation (NYSE:CARR) and gave it an Outperform rating with a $51 price target. The company has performed well since its spin-off from UTC in 2020, and the analysts believe there is potential for even more value creation through various means.
The company now has more freedom to allocate growth capital towards areas such as aftermarket, digital tools, product development, and expanding its footprint. The analysts predict that the company will see increased leverage on its investments through productivity gains, share gains, and the development of new digital capabilities.
Additionally, the analysts believe that portfolio management opportunities could lead to a re-rating of the company's value, and that its ability to deliver above-average incremental growth and improve free cash flow conversion could help narrow the company's valuation discount compared to its peers.
| Symbol | Price | %chg |
|---|---|---|
| 6367.T | 18865 | -0.72 |
| ARNA.JK | 755 | 0.66 |
| TOTO.JK | 232 | -0.86 |
| MLIA.JK | 324 | -0.62 |
Carrier Global Gains 3% Following Citi’s Upgrade
Carrier Global (NYSE:CARR) shares rose more than 3% intra-day today after Citi analysts upgraded the company to Buy from Neutral, raising their price target to $74 on the stock.
The upgrade is based on several key factors and assumptions. They project an expected EPS of $3.10 in 2025, translating to a price target of $74, which is based on a 24x multiple of the expected EPS.
The analysts anticipate that Carrier Global will be largely through its transformation process by the start of 2025, positioning it as a focused “pure play” HVAC company with an improving valuation multiple. They acknowledge the known headwind from Viessmann's weakness, which accounts for approximately mid-teens percentage of Carrier’s projected fiscal 2024 revenue. However, they expect that synergies from the Viessmann acquisition and broader productivity initiatives will largely offset this weakness.
The analysts forecast that core markets for Carrier should grow at mid-single digits over the next few years, with the U.S. residential and global transportation sectors reaching a bottom while the commercial HVAC sector remains robust. While the analysts note that Carrier is still a work in progress and improvement may not follow a straight line, they commend the company for being well-managed with a leading market share in a highly favored end market, seeing potential for further upside.
