Carrier Global shares are poised to hit all-time highs

Carrier Global Corporation NYSE: CARR released fourth-quarter earnings on February 5, 2024. The results themselves were unremarkable. The company reported quarterly earnings per share (EPS) of 53 cents on revenue of $5.10 billion. Revenue remained stable year-over-year (YOY), but EPS increased 33% YOY. The company also achieved better-than-expected free cash flow performance of $829 million.

However, the report is significant for current investors or those looking to get involved in CARR stock. That’s because this was the last earnings report in which the company will feature its security business, Global Access Solutions.

Carrier completed the sale of that business unit and its commercial refrigeration business to Honeywell International Inc. NASDAQ: HONOR in December 2023. The company earns approximately $4.5 billion in net proceeds from the two divestitures. And if that’s not enough, the company plans to sell its industrial fire businesses.

If you’re not familiar with Carrier, browsing the earnings presentation helps you understand why the company is making these decisions. These are low growth and non-core businesses. The company’s exit will free up cash for debt reduction and potential share buybacks.

This would allow the company to focus exclusively on its high-growth residential heating and cooling and heat pump businesses.

Out with the old, in with the new

In a separate move, Carrier completed the acquisition of Viessmann Climate Solutions. The company is considered the best company in the European residential hearing market and is launching new products for the European and North American markets.

As the company said when it first announced the acquisition of Viessmann, Carrier is transforming to become a pure-play global leader in smart climate and energy solutions.

CARR stock is on hold

CARR stock remained range-bound following the earnings report. This is mainly due to the lack of clarity. Although the company is getting leaner, the two departing business units will still be on the company’s balance sheet for the first half of 2024. That means it could take a couple of quarters before investors get a sense of what a Slimmer carrier.

This sentiment is showing up in Carrier’s analyst ratings at MarketBeat. Analysts have a Hold consensus on CARR stock with a price target of $58.29, just 7.2% above the current price. However, if the stock hits that number, it would collide with its all-time high, which has been a resistance point for the stock.

Carrier trades at about 19.8 times forward earnings, in line with the 20.2 times average for industrial stocks. However, you also need to consider the company’s dividend. The 1.4% yield is in line with the industry average and has grown at a rate of 48% over the past three years. Additionally, as the company expects a 50 basis point increase in operating margins this year, the dividend could increase.

Before you consider Carrier Global, you’ll want to hear this.

MarketBeat tracks Wall Street’s highest-rated and best-performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market takes hold… and Carrier Global wasn’t on the list.

While Carrier Global currently has a “Hold” rating among analysts, top analysts believe these five stocks are better buys.

View the five stocks here

Are you looking to generate income with your stock portfolio? Use these ten actions to generate a safe and reliable source of investment income.

Get this free report