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On Monday, Wolfe Research adjusted its stance on Carrier Global Corporation, a company traded on the New York Stock Exchange (NYSE:CARR), shifting its rating from ’Peer Perform’ to ’Outperform’ while establishing a new price target of $80.00. This change marks a significant shift in Wolfe Research’s view of Carrier Global, as it is the first time since September 2021 that the firm has recommended the stock. The $57.5 billion market cap company, currently trading at $66.13, has demonstrated strong momentum with a 23.5% return over the past year. According to InvestingPro analysis, Carrier Global appears to be trading near its Fair Value, with 12 additional exclusive insights available to subscribers.
The decision to upgrade Carrier Global’s rating is based on a reassessment of the company’s trajectory. Wolfe Research had previously expressed concerns about Carrier Global’s market performance, particularly in the European Union’s heat pump sector, following the acquisition of VCS. The acquisition led to a period of aggressive portfolio actions which Wolfe Research believed diluted the company’s value. As a prominent player in the Building Products industry, Carrier operates with a moderate level of debt and maintains a healthy current ratio of 1.25.
Despite these concerns, Carrier Global’s forward estimates have now stabilized, albeit slightly below the $3 mark. Wolfe Research’s upgrade indicates a renewed confidence in the company’s prospects. The new $80 price target suggests that Wolfe Research sees potential for significant stock appreciation. The company has shown robust revenue growth of 18.7% in the last twelve months, with analysts expecting continued profitability this year. InvestingPro subscribers can access detailed financial health scores and a comprehensive Pro Research Report, part of the platform’s coverage of over 1,400 US stocks.
Carrier Global has navigated through a period where its strategic moves, such as the VCS acquisition, have been closely scrutinized for their impact on the company’s financial health and market position. The analyst’s comments reflect a period of recalibration for Carrier Global, with forward estimates now having adjusted to a new baseline.
Investors will be monitoring Carrier Global’s performance closely, as Wolfe Research’s upgrade and new price target imply expectations of growth and recovery from the previously stagnant trend. Carrier Global’s stock may respond to this renewed analyst confidence as market participants reassess the company’s outlook.
In other recent news, Carrier Global Corporation reported strong fourth-quarter earnings, with adjusted earnings per share of $0.54, surpassing analyst estimates of $0.49. Despite revenue slightly missing the consensus at $5.15 billion compared to $5.27 billion, the company experienced a 19% year-over-year increase, including 6% organic growth. Carrier’s HVAC segment showed impressive results with an 11% organic growth, though the Refrigeration segment saw a 6% decline due to weaker North America truck and trailer sales. Looking ahead to 2025, Carrier projects adjusted earnings per share between $2.95 and $3.05 and anticipates revenue between $22.5 billion and $23 billion, aligning with analyst expectations.
Additionally, Carrier has made a significant investment in ZutaCore, a company known for its innovative liquid cooling technology for data centers, as part of its strategy to meet the growing cooling demands in high-density computing. This collaboration aims to deliver sustainable and energy-efficient cooling solutions for next-generation AI and data processing workloads. In another development, Mizuho (NYSE:MFG) Securities upgraded Carrier Global’s stock rating from Neutral to Outperform, highlighting the company’s robust free cash flow and growth potential. The analysts also noted Carrier’s shares are trading at a discount compared to its HVAC peers, despite its strong market position and financials. These recent developments underscore Carrier’s strategic initiatives and positive outlook in the industry.
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