Fundamentals to Watch About Carrier Global (CARR)

Now trading at a price of $42.89, Carrier Global has moved -6.1% so far today. In contrast, the S&P 500 index moved -1.0%. Read below for a basic value analysis of Carrier Global.

Carrier Global shares moved 4.1% over the last 52 weeks, with a high of $49.17 and a low of $33.1. During this time, the stock outperformed the S&P 500 index by 12.0%. As of January 2022, the company's 50-day average price is $45.0. Carrier Global Corporation provides heating, ventilating, and air conditioning (HVAC), refrigeration, fire, security, and building automation technologies worldwide. The large-cap Consumer Discretionary company has 52,000 full time employees and is based in Palm Beach Gardens, FL. Carrier Global has returned a 1.4% dividend yield over the last 12 months.

Exceptional EPS Growth with Healthy Leverage Levels:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $18,608 $17,456 $20,613 $20,421
Revenue Growth n/a -6.19% 18.09% -0.93%
Gross Margins 29.1% 29.3% 29.0% 26.8%
Gross Margins Growth n/a 0.69% -1.02% -7.59%
Operating Margins 12.1% 10.7% 11.4% 11.8%
Operating Margins Growth n/a -11.57% 6.54% 3.51%
Net Margins 11.37% 11.35% 8.07% 17.31%
Net Margins Growth n/a -0.18% -28.9% 114.5%
Earnings Per Share $2.03 $2.25 $1.87 $4.09
EPS Growth n/a 10.84% -16.89% 118.72%
Diluted Shares (MM) 873 880 890 835
Free Cash Flow (MM) $1,759 $1,380 $1,893 $1,390
FCF Growth n/a -21.55% 37.17% -26.57%
Capital Expenditures (MM) -$243 -$312 -$344 -$353
Net Debt / EBITDA nan 2.92 2.19 1.07

Carrier Global Is Reasonably Valued:

Compared to the Consumer Discretionary sector's average of 22.33, Carrier Global has a trailing twelve month P/E ratio of 10.5 and, according to its EPS guidance of 2.84, an expected P/E ratio of 15.1. Carrier Global's PEG ratio is 0.51 based on its 20.5% compound average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by Carrier Global's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 0.8, which still suggests that company's shares are possibly undervalued.

Carrier Global's P/B ratio is 4.6 compared to its sector average of 3.12. The company is likely overvalued in terms of its equity. The company's shares are currently trading 85.3% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 2.56 * 9.298) = $23.14

Carrier Global's elevated P/B ratio notwithstanding, the company's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued.

Carrier Global Is the Subject of Mixed Market Indicators:

19 analysts are following Carrier Global and have set target prices ranging from $40.0 to $55.0 per share. On average, they have given the company a rating of buy. At the current price of $42.89, CARR is trading -13.23% away from its average analyst target price of $49.43 per share, implying an analyst consensus of some upside potential for the stock.

The company has a very low short interest since 1.7% of the company's shares are tied to short positions. Institutions own 87.4% of Carrier Global's shares, while the insider ownership rate stands at 0.1%. The biggest shareholder is the Vanguard Group, Inc. with a 11% stake in the company worth approximately $3,989,640,009.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.