Key Stats for CARR Stock
- Past-30-Day Performance: -8%
- 52-Week Range: $50 to $81
- Valuation Model Target Price: $80
- Implied Upside: 37%
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What Happened?
Carrier Global Corporation stock traded near $59 per share this week and is down about 8% over the past 30 days, as investors reassessed near-term growth expectations across the HVAC and building solutions sector despite a stable long-term outlook.
The stock is down primarily because weaker residential and light commercial HVAC demand, combined with higher interest rates, is delaying construction activity and reducing near-term earnings visibility.
These pressures have weighed across peers like Trane Technologies and Johnson Controls, while uncertainty around the pace of recovery in these cyclical segments has added pressure to Carrier’s shares even as long-term demand remains intact.
This week at the JPMorgan Industrials Conference, CEO David Gitlin said Carrier remains on track to deliver its 2026 guidance on sales, profit, and adjusted EPS, while highlighting record commercial HVAC backlog and another very strong quarter of data center orders after CSA data center orders rose about 400% in 4Q.
Carrier provides cooling systems used in data centers, which must maintain precise temperatures to support AI and high-performance computing, making this a key growth driver for the business.
Gitlin said Carrier came into 2026 with about $1 billion of backlog for 2026 and has committed to $1.5 billion of data center revenue this year, with second-quarter sales still expected at about $6 billion after roughly $5 billion in the first quarter.
He added that second-half growth is expected to be driven by data center shipments, saying the company is “really well positioned” to deliver that ramp.
Recent institutional activity has been mixed but generally supportive. Ameriprise boosted its stake by over 500% to about 4.19 million shares valued near $250 million, while California Public Employees’ Retirement System increased its position to about 1.4 million shares worth roughly $82 million.
At the same time, AllianceBernstein reduced its holdings by about 5% to roughly 4.4 million shares, and Swiss Life Asset Management trimmed its stake by about 7%.
Overall institutional ownership remains high at about 91%, reflecting continued long-term conviction even as the stock trades under pressure.
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Is CARR Undervalued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): 4.0%
- Operating Margins: 16.5%
- Exit P/E Multiple: 21.0x
Revenue growth has stabilized after a recent decline, with expectations pointing to a gradual recovery supported by electrification trends and demand for energy-efficient HVAC systems rather than a sharp cyclical rebound.
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Estimates reflect a shift toward higher-value segments like heat pumps and aftermarket services, which generate recurring revenue and typically carry higher margins because they require less capital investment and benefit from ongoing service contracts.
This supports the view that future returns depend less on new construction volumes and more on pricing power, service attachment, and expansion of recurring revenue streams.
Based on these inputs, the model implies a value near $80 per share, suggesting about 37% upside over the next few years, indicating the stock appears undervalued at current levels.
Performance over the next year is tied to several key developments. Carrier is increasingly exposed to data center cooling demand, where AI-driven infrastructure buildout is driving strong order growth and backlog expansion.
Adoption of heat pumps across Europe and North America supports growth as electrification trends accelerate.
Margin expansion depends on scaling these higher-efficiency products while maintaining cost discipline. Growth in aftermarket services adds recurring revenue that is less sensitive to economic cycles.
At current levels, Carrier appears undervalued, with future performance driven by data center exposure, electrification trends, and a shift toward more recurring and higher-quality revenue streams.
How Much Upside Does CARR Stock Have From Here?
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- Operating Margins
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