CARRIER GLOBAL CORPORATION (CARR): what the price requires

At today's price, CARRIER GLOBAL CORPORATION (CARR) is priced for today's economics sustained for ~14.3 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/CARR

Headline

FieldValue
TickerCARR
CompanyCARRIER GLOBAL CORPORATION
Current price$68.55/sh
CompositionClimate Solutions Americas - Product 43% / Climate Solutions Americas - Service 5% / Climate Solutions Europe - Product 21% / Climate Solutions Europe - Service 2% / Climate Solutions Asia Pacific, Middle East & Africa - Product 12% / Climate Solutions Asia Pacific, Middle East & Africa - Service 3% / Climate Solutions Transportation - Product 12% / Climate Solutions Transportation - Service 1%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basissegment
Must persist for14.3y

Solve inputs: computed at a 9.5% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2.7 years.

How unusual the bet is: high

ReferenceValue
cohort percentile (of 225 peers)100
sustained it ~10 years at this level14%
implied end-window share0%

Valuation X-Ray

Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset3.97x4expensive
Earnings6.18x4expensive
Relative1.99x3expensive
Growth1.85x3expensive

Families that call it expensive: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.3%); the inversion above states its own rate.

Per-Model Detail (n=14)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$8.388.18xyesFCF base $1.7B, growth -5% (input: historical growth), terminal g 0.5%, WACC 8.3%, 5yr projection
DCF Exit MultipleGrowth$54.061.27xyesExit EV/EBITDA: 36.3x / 38.3x / 40.3x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative$34.371.99xyesP/E 25.83x (blended: static sector reference 18x + trailing (TTM) 44x), scenarios: 21.8x / 25.8x / 29.8x (bear / base = reference held flat / bull), EV/EBITDA 19.88x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$16.804.08xyesBV/sh $15.96, ROE (TTM) 9.7%, ke 9.3%
Two-Stage Excess ReturnAsset$17.233.98xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$37.141.85xyesRev $21.9B, growth -5% (input: historical growth; tapered), Terminal P/S: 2.2x / 2.6x / 3.1x (bear / base = today's held flat / bull, cap 8x)
Growth-Adjusted P/ERelative——no—
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$26.382.60xyesNormalized EBIT (5y avg op income, one-time charges added back) $3.51B × (1−21%) / WACC 8.3% → EPV (no growth)
Residual IncomeAsset$17.313.96xyesBV $15.96 + 5yr PV of (ROE (TTM) 9.7% − Kₑ 9.3%) × BV; BV grows 6.3%/yr
Graham NumberAsset$23.442.92xyes√(22.5 × EPS $1.53 × BVPS $15.96) — Graham's conservative floor
EV/EBITDA RelativeRelative$12.375.54xyesEBITDA $1.80B × sector EV/EBITDA 12.0x
FCF YieldEarnings$8.348.22xyesFCF $1686.0M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$7.409.26xyesSBC-adj FCF $1.61B (FCF $1.69B − SBC $0.07B) capitalized at Kₑ
Ben Graham FormulaEarnings$1.2853.55xyesEPS $1.53 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median)
ROIC-Justified P/BAsset$1.6042.84xyesBV $15.96 × (ROIC 0.8% / WACC 8.3%) (excluded from median)
P/Sales SectorRelative$64.871.06xyesRevenue $21.87B × sector P/S 2.5x
PEG Fair ValueRelative——no—
Earnings YieldEarnings$16.544.14xyesEPS $1.53 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$11.8b
Net debt / NOPAT (after-tax)6.41x
Net debt / operating income (pre-tax)5.06x
Share count CAGR (buyback)-0.9%
Burning cashno

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

Bull Case

What a static valuation lens misses about Carrier is that its earnings are caught mid-transformation, and the business emerging is better than the trailing numbers show. Carrier spent the past two years reshaping its portfolio, divesting fire and security and adding Viessmann's European climate business, and the divestiture noise and integration costs depress current reported profit. Underneath that, the company is becoming a focused climate platform with a growing layer of recurring aftermarket and service revenue. The filing describes the strategy directly, expanding "service and aftermarket solutions, including on-demand and subscription-based monitoring" that strengthen customer relationships and lift aftermarket growth. Service revenue on an installed base of HVAC equipment is stickier and higher-margin than one-time equipment sales, and it is a larger share of Carrier than a quick read of the income statement suggests.

The growth engines are genuinely powerful and recent. Data center cooling is the standout: orders rose more than 500% in the first quarter of 2026, the company roughly doubled data-center sales to about $1 billion in 2025 and expects roughly $1.5 billion in 2026, and the backlog already fully covers expected 2026 data-center sales. AI data centers generate enormous heat, and Carrier is investing in liquid-cooling technology to capture it. The second engine is the Viessmann heat-pump business, where German residential and light-commercial heat-pump sales grew about 35% as Europe pushes to electrify heating. Total orders rose 11% and commercial HVAC orders rose 35%, so the bookings that lead future revenue are accelerating even as current organic sales are flat.

Management is leaning into that confidence with capital return. Carrier announced a $5 billion share-repurchase program and raised its dividend, returning about $500 million to shareholders in the first quarter alone. A company committing to that scale of buyback while it integrates a major acquisition is signaling that it sees the current price as undervaluing the platform it has built. For an investor who believes the data-center and heat-pump demand is structural rather than cyclical, Carrier offers exposure to two secular climate trends through an established global brand, at a time when the reported earnings understate the business.

Bear Case

The bear case is cleanest when read through the valuation methods, because they disagree sharply with the price and the conservative ones dominate. Every standard family, asset value, earnings power, peer multiples, and even forward growth, lands below the current price; none reaches it. When no method supports the price, the stock is being valued on a continuation and acceleration of the data-center and heat-pump story rather than on the business as it currently earns. The inversion locates the priced-in premium specifically in the transportation-climate segment and implies that segment must grow at its self-funding ceiling for roughly fifteen years, with its multiple sitting at the very top of the peer distribution. That is a demanding bet, and only about one in seven companies sustains such growth even for a decade.

The leverage is the structural fragility that makes the demanding bet riskier. The Viessmann acquisition was funded with substantial debt, leaving net debt around $11.8 billion and a debt-to-EBITDA ratio near 5.7 times, well above the company's historical norm closer to 3.5 times. High leverage is manageable when earnings are growing and rates are stable, but it removes the cushion to absorb a downturn or an integration stumble, and it diverts cash flow to interest and deleveraging that might otherwise fund growth or buybacks. The same $5 billion buyback that signals confidence also competes with deleveraging for the company's cash at a time when the balance sheet is stretched.

The near-term operating reality undercuts the secular narrative more than the order growth suggests. Organic sales actually declined 1% in the first quarter, and full-year guidance is only flat to low-single-digit organic growth, with adjusted earnings guided to about $2.80 per share including a $250 million revenue headwind from a portfolio exit. On top of that, the company faces $400 million to $450 million in tariff-related costs and a soft China market. The filing also flags the operational risks that come with a hardware business, including "price increases, raw material/component shortages" and supply disruptions. The bear case is that the data-center orders, while real, are not yet large enough to offset a flat core, and the price has run ahead to credit a growth acceleration that the leverage, the tariffs, and the soft organic backdrop could delay. Tellingly, analyst price targets cluster close to the current price, with some firms cutting estimates, which says the street sees limited upside from here.

Valuation

Carrier is a multi-segment climate business, so its price is best read by decomposing where the premium sits rather than against a single company-wide multiple. The inversion points to the transportation-climate segment as the piece carrying the priced-in premium, implying that segment grows near its self-funding ceiling for roughly fifteen years and trades at the very top of its peer group. That is the demanding part of the bet. The broader read is that today's price of about $72 (June 27, 2026) is not supported by the company's current earnings, which are depressed by the portfolio transformation, but by the expectation that the data-center and heat-pump engines drive years of accelerating growth.

The valuation methods make the gap explicit and unanimous. The asset-based, earnings-power, peer-multiple, and forward-growth methods all land below the current price; none reaches it. That pattern means the price is a bet beyond what any standard frame supports on the business as it stands. The important caveat is that the trailing earnings the methods lean on are artificially low: divestitures, integration costs, and tariff headwinds have compressed reported profit, so the static methods understate the normalized earnings power of the cleaner climate platform. Even adjusting for that, though, the price embeds a meaningful growth premium, and the analyst community, with targets clustered near the current price, is not crediting much further upside. The honest framing is that the methods say expensive on trailing numbers, the business is better than those numbers, and the price already pays for the improvement.

Solvency is the load-bearing concern and the reason the growth bet carries real risk. Net debt of roughly $11.8 billion, with leverage near 5.7 times EBITDA against a historical norm closer to 3.5 times, is the residue of the Viessmann acquisition. That debt does not flex with demand, and it competes with the buyback for cash flow. The data-center backlog and the recurring aftermarket revenue give real visibility that supports the debt, but the combination of high leverage, flat organic growth, and $400 million to $450 million of tariff costs leaves less margin for error than the order-growth headlines imply. What a buyer at this price underwrites is that the data-center and heat-pump demand accelerates organic growth materially while the company deleverages, on a balance sheet that currently has limited room if either the demand or the integration disappoints.

Catalysts

The conversion of orders into organic revenue is the catalyst that decides the thesis. First-quarter 2026 total orders rose 11%, commercial HVAC orders rose 35%, and data-center orders rose more than 500%, yet organic sales declined 1%. The gap between booming orders and flat current sales is the central tension; the quarters in which the backlog starts converting to reported organic growth are the proof points the bull case needs.

Data center cooling is the structural growth catalyst. Carrier roughly doubled data-center sales to about $1 billion in 2025, expects approximately $1.5 billion in 2026 with backlog already covering it, and expanded its investment in waterless liquid-cooling technology for high-density AI data centers. The scale-up of this business, alongside the roughly 35% growth in German heat-pump sales, is what could lift the company's overall growth rate above its mature HVAC base.

The offsetting items to watch are tariffs, leverage, and capital return. Full-year guidance reaffirms about $22 billion in sales and adjusted earnings near $2.80 per share, absorbing $400 million to $450 million of tariff costs and a soft China market. The pace of deleveraging against the $5 billion buyback authorization is the financial balance to monitor, and analyst sentiment is mixed, with a moderate Buy consensus, price targets near the current level, and some firms trimming estimates on near-term earnings momentum.

Peer Cohorts (Per Segment, With Filing Citations)

Climate Solutions Americas (reported)

Climate Solutions Europe / Climate Solutions Asia Pacific, Middle East & Africa (reported)

Climate Solutions Transportation (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Carrier Q1 2026 results

View the full interactive CARR report on boothcheck