On Friday, RBC Capital Markets adjusted its price target for Carrier Global (NYSE:CARR), reducing it slightly from $87.00 to $86.00 while maintaining the Outperform rating on the stock. Currently trading at $68.33, Carrier's stock sits within a broader analyst target range of $53 to $96.
The move comes as the analyst recognized Carrier's emergence from the United Technologies (NYSE:RTX) breakup in April 2020. Carrier, now a standalone company focused on heating, ventilation, and air conditioning (HVAC), is considered to be at an advantageous point in its cycle.
The analyst highlighted Carrier's position as a "Hybrid" in RBC's Investment Framework, which is considered favorable at this stage. As a prominent player in the Building Products industry with a market capitalization of $61.3 billion, the firm also sees potential for Carrier's stock to be re-rated higher in comparison with its HVAC industry peers.
According to InvestingPro, the company has demonstrated strong financial performance with a 25.6% revenue growth in the last twelve months. The attractiveness of the stock is further bolstered by ongoing megatrends in Indoor Air Quality (IAQ) and Healthy Buildings, as well as the company's solid environmental, social, and governance (ESG) narrative.
Carrier's opportunities for portfolio optimization and improvement of its free cash flow (FCF) conversion were also noted as supportive factors for the Outperform rating. According to RBC Capital Markets, these strategic moves could enhance the company's financial performance and market valuation.
The analyst's statement underscores Carrier's prospects in the context of the broader Multi-Industry sector's trend toward demergers, suggesting that the company's focused approach post-spinout aligns with the current industry dynamics.
Despite the slight reduction in the price target, RBC Capital's outlook on Carrier remains positive. InvestingPro analysis indicates the stock is currently trading above its Fair Value, with 12+ additional exclusive insights available to subscribers, including detailed valuation metrics and growth indicators in the comprehensive Pro Research Report.
In other recent news, Carrier Global Corporation has been active in financial moves and executive changes. Goldman Sachs reinstated a Buy rating on the company's stock, recognizing its strong revenue growth of 25.6% over the last year, reaching $24.8 billion. The firm also anticipates above-average earnings per share growth over the next two years for Carrier Global.
Furthermore, the company raised its quarterly dividend to $0.225 per share, marking an 18% increase and continuing its track record of dividend growth. Significant executive changes have also occurred, with Senior Vice President and Chief Legal Officer, Kevin O'Connor, stepping down and Francesca Campbell taking over the role.
In recent financial maneuvers, Carrier issued €750 million in 3.625% euro-denominated notes due in 2037, using the proceeds and existing cash to redeem its 4.375% Notes due in 2025. Q3 financials showed a 21% increase in sales to $6 billion, with the HVAC segment seeing a 26% increase, largely due to the acquisition of Viessmann Climate Solutions.
Lastly, analysts at Baird and Oppenheimer have maintained an Outperform rating on Carrier Global, while Mizuho (NYSE:MFG) held the company at Neutral.
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