Is Carrier Global Stock Underperforming the Dow?

Valued at a market cap of $57.5 billion, Carrier Global Corporation (CARR) provides various intelligent climate and energy solutions, including advanced heating, ventilation, refrigeration, air conditioning, fire, security, and building automation technologies. The Palm Beach Gardens, Florida-based company offers its products under numerous brands like Carrier Commercial Refrigeration, Carrier Transicold, BrokerBay, Kidde, Marioff, Autronica, and Edwards.

Companies worth $10 billion or more are typically classified as “large-cap stocks,” and CARR fits the label perfectly, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the building products & equipment industry. The company’s expertise in smart and connected solutions, including IoT-based building automation, enhances energy management and operational efficiency. Additionally, its focus on strategic acquisitions and partnerships strengthens its position in the industry, allowing it to expand its product portfolio and technological capabilities. With a commitment to sustainability, innovation, and superior quality, Carrier continues to be a trusted name in climate control and building safety solutions.

Despite its notable strength, this energy solutions provider has slipped nearly 20.2% from its all-time high of $83.32, touched on Oct. 15, 2024. Moreover, it has declined 8.9% over the past three months, lagging behind the broader Dow Jones Industrials Average’s ($DOWI) 5.3% decline during the same time frame.

On a YTD basis, shares of CARR are down 2.5%, which is mostly in line with DOWI. However, in the longer term, CARR has soared 16.1% over the past 52 weeks, outpacing DOWI’s 6.6% return.

To confirm its recent bearish trend, CARR began trading below its 200-day moving average in late January and has remained below its 50-day moving average since late October 2024, with slight fluctuations.

On Feb. 11, shares of CARR plunged 1.6% after its mixed Q4 earnings release. Adjusted earnings came in at $0.54 per share, marking a 50% increase from the previous year and surpassing Wall Street’s expectation of $0.51. Additionally, its adjusted operating margin expanded by 370 basis points, reflecting improved profitability. However, what weighed on investor sentiments was CARR’s revenue miss. Its net sales advanced 19.3% year-over-year to $5.2 billion but missed the forecasted figure by 3.4%. Lower refrigeration sales, mainly driven by declines in North America truck and trailer, somewhat affected its otherwise strong performance and led to its top-line miss.

Looking ahead, for fiscal 2025, Carrier expects to achieve sales between $22.5 billion and $23 billion and anticipates adjusted EPS in the range of $2.95 - $3.05, reflecting mid to high-teens growth. 

Carrier Global has considerably outpaced its rival, AAON, Inc.’s (AAON) 1% gain over the past 52 weeks and 30.2% decline on a YTD basis.

Despite CARR’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 22 analysts covering it, and the mean price target of $81.58 suggests a 22.6% premium to its current levels.