✏️ Stock Research ‼️ Carrier Global Corporation Ticker: $CARR Sector: Industrials Current Price: $29.11 Market Cap: $25.2B *Provides heating, ventilating, and air conditioning (HVAC), refrigeration, fire, security, and building automation technologies worldwide [Thread]
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◽️Financial Metrics◽️ P/E Ratio: 22.25 ✅ P/FCF: 14.44 ✅ Current Ratio: 1.68 ✅ Debt/EBITDA: 5.91 ❌ Proj. 5Y Growth: -8.66% ❌ Dividend Yield: 0.27% ❌ Payout Ratio: 7.30% ❌ ROIC: 6.32% ✅
🗣 News 🗣 Carrier was spun off from United Technologies Corp. on April 2nd. On April 16 they launched OptiClean, a portable negative air machine able to clean & remove air that could be potentially contaminated by the coronavirus. Also launched 2 new HVAC products in May.
In June Carrier launched their Healthy Buildings Program to offer solutions & services to promote healthier & safer indoor environments. That same month they launched the BluEdge Service Platform, which is a hi-tech tiered suite of services across all 3 of their segments.
On July 10 they introduced a higher-capacity version of the OptiClean. A few days later they launched a new program named Carrier Alliance that aims to optimize its supply chain by fortifying the relationships with their suppliers. It’s targeting $600M in cost savings over 3 yrs
As part of the Healthy Buildings Program, Carrier introduced a webinar series to help safely re-open schools, businesses, & more. They also introduced Healthy Homes, a suite of solutions aimed at improving the overall health of homes as well as personal health. *Focused on ESG*
🔅Summary🔅 *YTD: 143.49% 👀 *Fun Fact: Was # 1 in S&P 500 YTD (prior to addition of $ETSY this week) *Diversified business ✅ *Revenue Breakdown: HVAC = 51% Fire & Security = 29% Refrigeration = 20% Americas = ~55% Europe, Middle East & Africa = ~30% Asia Pacific = ~15%
*Global trends providing growth opportunities: Climate change Urbanization Growing Middle Class Digitalization *Global HVAC market set to grow by ~$17B through 2024 (CAGR of ~5%) *Possible refrigeration opportunity with COVID-19 vaccines 👀
*Targeting mid single-digits revenue growth in medium term ⬆️ *Targeting high single-digits adjusted EPS growth in medium term ⬆️ *Focused on 90-100% FCF conversion *Consistent revenue of ~$19B/year from 2017-2019 ✅ *As stand-alone company, they’re looking to be more agile
*Q2/20 Revenue down 20% YoY ❌ *Q2/20 Oper. Profit down 45% YoY ❌ *Q2/20 Net Income down 67% YoY ❌ *Q2/20 Adj. EPS down 55% YoY ❌ *Q2/20 Free Cash Flow of $463M ✅ (Q1/20 generated -$1M) *2020 revenue guidance of $15B-$17B maintained *All financials impacted by pandemic
*Valuation is lower than competitors (no history to judge vs itself) ✅ *Decent liquidity - cash & cash equivalents now sit at $2.7B ✅ *Substantial long-term liabilities ❌ (possible dilution risk in near term) *Fairly low interest expense ✅ *FCF can currently cover it ✅
*All in all, $CARR is an intriguing company. They are currently fairly valued. The debt load is a concern, but as long as sales begin to normalize, it shouldn’t be an issue. The first announced dividend was less than expected, but this is due to a new focus on medium term growth.
*requested by @HeroDividend ⚠️ Disclaimer: I am not a financial advisor. This information is intended for educational purposes only.
