On Thursday, Goldman Sachs reinstated coverage on shares of Carrier Global (NYSE: NYSE:CARR), assigning the stock a Buy rating. As a prominent player in the Building Products industry with a market capitalization of $65.3 billion, the company has demonstrated strong momentum with a 32% return over the past year.
The firm highlighted the company's significant transformation into a dedicated HVAC (heating, ventilation, and air conditioning) original equipment manufacturer (OEM) that stands to gain from both long-term industry trends and a potential upswing in the business cycle. According to InvestingPro, Carrier has maintained a consistent dividend growth track record, raising its dividend for 5 consecutive years.
The analyst from Goldman Sachs pointed out that Carrier Global is well-positioned to capitalize on secular growth drivers and a cyclical turning point. The company's strong positioning is reflected in its impressive 25.6% revenue growth over the last twelve months, reaching $24.8 billion.
Despite potential short-term disruptions due to the transition to A2L refrigerant, the firm expects Carrier's focus on Applied HVAC and Viessmann's profit improvement, along with growth in Transport Refrigeration, to be overlooked by the market.
Goldman Sachs anticipates that Carrier Global will experience above-average earnings per share (EPS) growth over the next two years, projecting an increase of 20.1% compared to the 11.5% average for the Multis and 13.6% for HVAC peers. This growth expectation is a key factor in the firm's positive outlook on the stock.
The analyst set a 12-month price target for Carrier Global at $96, which suggests a free cash flow (FCF) yield of approximately 4.0% based on 2026 estimates. This target reflects the firm's confidence in Carrier's ability to deliver shareholder value through its strategic focus and industry positioning.
In other recent news, Carrier Global Corporation has been making significant financial and executive moves.
The company has raised its quarterly dividend to $0.225 per share, marking an 18% increase from previous dividends. This continues Carrier's track record of raising dividends for four consecutive years. Additionally, Carrier has seen significant executive changes with Senior Vice President and Chief Legal Officer, Kevin O'Connor, stepping down and Francesca Campbell set to take over the role.
Carrier has also issued €750 million in 3.625% euro-denominated notes due in 2037, using the proceeds and existing cash to redeem its 4.375% Notes due in 2025. In their Q3 financials, Carrier reported a 21% increase in sales to $6 billion, with organic sales growing by 4%. The HVAC segment saw a 26% increase in sales, largely due to the acquisition of Viessmann Climate Solutions. Adjusted EPS from continuing operations was $0.77, marking a 3% increase year-over-year.
Analysts at Baird and Oppenheimer maintained an Outperform rating on Carrier Global, while Mizuho (NYSE:MFG) held the company at Neutral. The company repurchased $400 million in shares in Q3 and plans to reach $1 billion in buybacks by year's end.
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