Carrier Global Corporation CARR
Verdict: Strong sell. Fair value $40.73 against a price of $53.79 on 6 Jan 2026, 24% below the price.
In plain words
The case for: Narrow competitive moat provides durability. Market leadership enables pricing power. Industry tailwinds with growing market.
The case against: Intense competitive pressure could compress margins. In 2024, Net Income was $5.60B while Operating Cash Flow was only $0.56B. This results in an.... The Accruals Ratio for 2024 is +0.135, calculated as ($5.60B NI - $0.56B OCF) / $37.40B Total....
Main risks
- Extremely poor profitability and returns on capital. The proxy operating margin is a razor-thin 1.5% and the estimated ROIC is only 1.0%, indicating the business is not earning its cost of capital.
- Dangerously high leverage. The estimated Net Debt/EBITDA ratio of ~7.9x is at a critical level, posing significant financial risk, especially given the weak underlying profitability.
- Volatile and questionable earnings quality. The latest annual Net Income ($5.6B) is completely disconnected from TTM Free Cash Flow ($1.13B), suggesting a large one-time gain is distorting ROE and masking poor operational cash generation.
- In 2024, Net Income was $5.60B while Operating Cash Flow was only $0.56B. This results in an...
- The Accruals Ratio for 2024 is +0.135, calculated as ($5.60B NI - $0.56B OCF) / $37.40B Total...
- Intense competitive environment