RBC raises Carrier Global price target to $87, keeps Outperform

On Tuesday, RBC Capital Markets updated its outlook on Carrier Global Corporation (NYSE:CARR) shares, increasing the price target to $87 from the previous $86 while maintaining an Outperform rating. The revised target follows Carrier’s Investor Day event held on Monday, where the company outlined its growth strategy. The stock has shown strong momentum, delivering a 16.3% return over the past year. According to InvestingPro data, 12 analysts have recently revised their earnings estimates upward for the upcoming period, suggesting growing confidence in the company’s trajectory.

Deane Dray of RBC Capital highlighted Carrier’s potential for medium-term revenue and earnings growth. The company has set a target of 6%-8% organic revenue growth and mid-teens percentage growth in earnings per share (EPS). According to Dray, these goals are both reasonable and achievable based on Carrier’s current trajectory. The company’s recent performance supports this outlook, with revenue growing 16.7% in the last twelve months to $22.3 billion. InvestingPro analysis reveals that Carrier operates with a moderate debt level and has maintained strong profitability metrics.

During the Investor Day, Carrier emphasized its intention to achieve consistent and balanced growth across all four of its business segments. The company has a strategy in place aimed at double-digit percentage growth in the aftermarket segment indefinitely, as well as expanding its share of wallet through end-to-end system solutions. With a robust gross profit margin of 26.8% and a return on assets of 15.2%, Carrier demonstrates strong operational efficiency in executing its growth strategy.

Carrier, recognized as a top-3 leader in the global HVAC market, identified several areas with attractive growth opportunities. These include datacenters, the European heat pump market, large non-residential projects, reshoring initiatives, and key emerging markets such as India, China, and Saudi Arabia.

Furthermore, Carrier’s capital allocation strategy includes pursuing bolt-on mergers and acquisitions to strengthen its market position. RBC Capital’s analysis suggests that Carrier’s shares are particularly appealing when compared to peers like Trane Technologies (NYSE:TT), Johnson Controls (NYSE:JCI), and Lennox International (NYSE:LII), based on relative price-to-earnings (P/E) ratios. For deeper insights into Carrier’s valuation and growth potential, investors can access comprehensive analysis and additional metrics through InvestingPro, which offers exclusive financial health scores and detailed company research reports.

In other recent news, Carrier Global Corporation reported its first-quarter 2025 earnings, surpassing Wall Street expectations with an adjusted EPS of $0.65 compared to the forecast of $0.58. The company also exceeded revenue projections, posting $5.22 billion against the anticipated $5.18 billion, reflecting strong operational execution and market demand. Additionally, Carrier Global announced the acquisition of Addvolt, a Portuguese company specializing in transport electrification technology, to enhance its electrification strategy. This acquisition aligns with Carrier’s commitment to sustainable solutions, although the financial terms were not disclosed.

Furthermore, Carrier Global plans to invest an additional $1 billion in its U.S. operations over the next five years, aiming to create 4,000 new jobs and expand its manufacturing capabilities. This investment will focus on producing components for the company’s Home Energy Management System. In terms of analyst activity, Carrier has not seen recent upgrades or downgrades, but its strategic initiatives continue to draw attention.

The company’s recent developments also include the integration of Addvolt’s technology into Carrier’s Climate Solutions Transportation segment, furthering its innovation in electric trailer refrigeration systems. These moves are part of Carrier’s broader strategy to capture growth in the climate solutions market and strengthen its competitive position.

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