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 | 16940 | 2.6 |
| ARNA.JK | 635 | 0.79 |
| TOTO.JK | 206 | 0 |
| MLIA.JK | 300 | -0.67 |
Carrier Global Corporation (NYSE:CARR) Quarterly Earnings Preview
- Carrier Global Corporation is expected to report an EPS of $0.51 and revenue of approximately $5.2 billion for the upcoming quarter.
- The company's performance is anticipated to be bolstered by its HVAC segment and aftermarket services, despite challenges in Europe and China.
- Carrier has outperformed the Zacks Consensus Estimate in the last four quarters, with an average earnings surprise of 8.19%.
Carrier Global Corporation (NYSE:CARR) is a leading provider of heating, ventilating, and air conditioning (HVAC) systems, as well as refrigeration and fire and security solutions. The company is set to release its quarterly earnings on February 11, 2025. Analysts expect an earnings per share (EPS) of $0.51 and revenue of approximately $5.2 billion.
Carrier's performance is expected to be driven by strong growth in its HVAC segment and robust aftermarket services. However, challenges in Europe and China may have posed difficulties. The Zacks Consensus Estimate for the fourth quarter is $0.51 per share, reflecting a slight increase over the past month but a year-over-year decline of 3.77%. Revenue is estimated at $5.43 billion, a 6.42% increase from the previous year.
Carrier has consistently exceeded the Zacks Consensus Estimate in the last four quarters, with an average earnings surprise of 8.19%. Investors are keen to see if this trend continues. The company's earnings are expected to decline by 3.8% compared to the previous year, but revenues are projected to increase by 6.4%, reaching $5.43 billion. Recent downward revisions in EPS estimates by 3.9% highlight analysts' reassessment of initial projections.
The company's financial metrics provide insights into its valuation. Carrier's price-to-earnings (P/E) ratio is approximately 16.56, and its price-to-sales ratio is about 2.39. The enterprise value to sales ratio is around 2.84, and the enterprise value to operating cash flow ratio is approximately 45.49. The earnings yield is about 6.04%, and the debt-to-equity ratio is approximately 0.88, indicating a moderate level of debt relative to equity. Carrier's current ratio of about 1.08 suggests its ability to cover short-term liabilities with short-term assets.
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.
