CARR

Of course. Here is a comprehensive analysis of whether CARR is worth buying.

**Analysis Summary**

CARR presents a classic case of a stock in a challenging transition. Its technical chart is weak, trading near 52-week lows and showing significant underperformance. Fundamentally, the picture is concerning, with clear evidence of margin compression in profitability and strained liquidity. The valuation appears superficially attractive on a trailing basis but is complicated by high forward-looking ratios that suggest the market is pricing in a strong recovery.

The primary risk is operational; the company needs to successfully navigate cost pressures and demonstrate it can return to sustainable growth. The recent price decline may already reflect these challenges, offering a potential entry point for patient investors who believe in a turnaround.

**Buy Recommendation**

Based on the analysis, a cautious "hold" or "wait for confirmation" stance is more appropriate than an outright buy at this time. While the depressed price and low trailing P/E suggest the bad news may be priced in, the weakening fundamentals and high forward valuation require proof of a operational turnaround. Investors should wait for evidence of stabilizing or improving profit margins in upcoming earnings reports before considering a position. The stock appears to be in a "show me" state.

RockFlow Model Forecast: Three Scenarios for 2026

Based on the comprehensive analysis provided, here is a 12-month outlook for Carrier Global (CARR):

12-Month Outlook for CARR

The 12-month outlook is guarded and hinges on the company's ability to execute a successful operational turnaround. The key catalyst will be evidence of reversing the recent margin compression, demonstrated through improved profitability in upcoming quarterly earnings reports. Potential risks remain significant, primarily centered on the company's failure to navigate persistent cost pressures and its high forward valuation, which prices in a strong recovery that may not materialize. Without a specific analyst target, a cautious target price range would likely be tied to a re-rating contingent on proof of execution, making the near-term path volatile as the stock remains in a "show me" state.

Wall Street Consensus

Most Wall Street analysts are optimistic about CARR's 12-month outlook, with consensus target around $55.60, indicating expected upside potential.

Overall, CARR has investment potential but also faces challenges. Here are key factors to weigh before investing.

CARR has demonstrated weak relative performance compared to the broader market, currently trading near the lower end of its yearly range.

The stock posted a modest 1-month gain of 1.96% but remains down 4.97% over three months, significantly underperforming the market by 8.34% during that period. This divergence highlights persistent weakness despite the recent minor recovery.

Trading at $55.21 places CARR just 10% above its 52-week low of $50.24 and 32% below its high of $81.09, positioning it in deeply oversold territory. The substantial 37.62% maximum drawdown over the past year reinforces this oversold condition relative to its recent historical trading range.

Revenue & Profitability CARR's Q3 2025 performance shows weakening profitability with revenue of $5.58 billion and a net margin of 7.7%, down from Q2's 9.7%. The gross margin contracted significantly to 26.0% from 29.1% in the prior quarter, indicating potential pricing pressure or cost inflation. Operating margin also declined to 9.7% from 14.4%, reflecting compressed profitability across the business.

Financial Health The company maintains moderate leverage with a debt-to-equity ratio of 0.85 and total debt to capitalization of 46%. However, liquidity is somewhat constrained with a current ratio of 1.14 and quick ratio of 0.75, while the cash flow to debt ratio of 0.03 suggests limited capacity for debt service from operating cash flows.

Operational Efficiency CARR demonstrates modest efficiency metrics with ROE at 2.9% and asset turnover of 0.15, indicating relatively low returns on capital employed. The operating cycle of 116 days and cash conversion cycle of 51 days show adequate working capital management, though inventory turnover of 1.37 suggests room for improvement in inventory efficiency.

CARR's valuation metrics present a mixed picture. The trailing P/E of 11.4 appears attractive, suggesting potential undervaluation based on current earnings. However, the significantly higher forward P/E of 29.6 and elevated EV/EBITDA of 72.0 indicate the market anticipates substantial future earnings growth or reflects high expectations. The negative PEG ratio of -1.0 raises concerns about the sustainability of this growth trajectory, pointing to potential overvaluation risk when considering growth-adjusted metrics.

Without industry average data for comparison, it's challenging to provide definitive context for CARR's valuation relative to peers. The elevated EV/EBITDA ratio of 72.0 is particularly noteworthy and would benefit from industry benchmarking. For a comprehensive peer assessment, obtaining industry-specific multiples would be essential to determine whether CARR's valuation metrics represent a premium or discount to comparable companies in its sector.

Volatility Risk: With a beta of 1.314, CARR exhibits higher volatility than the broader market, meaning it is likely to experience larger price swings in both directions. This elevated sensitivity is corroborated by a significant one-year maximum drawdown of -37.62%, indicating substantial downside risk during market downturns. The stock is therefore susceptible to heightened volatility risk.

Other Risks: The notable absence of reported short interest suggests a lack of significant speculative bearish sentiment, which can be a positive indicator. However, this does not eliminate other potential risks, such as industry-specific cyclicality or broader economic factors affecting the HVAC sector. Investors should also consider liquidity and operational execution risks inherent to the company's business model.