Carrier Global Stock: Is CARR Underperforming the Industrial Sector?

Carrier Global Corporation (CARR), headquartered in Palm Beach Gardens, Florida, provides heating, ventilating, air conditioning, refrigeration, fire, security, and building automation technologies. Valued at $49.2 billion by market cap, the company also provides building services such as audit, design, installation, system integration, repair, maintenance, and monitoring.

Companies worth $10 billion or more are generally described as "large-cap stocks," and CARR perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the building products & equipment industry. CARR's diverse brand portfolio (Carrier, Viessmann, Toshiba) makes it a global leader in climate and energy solutions. Its strong brand equity, built on innovation and quality, drives its competitive edge.

Despite its notable strength, CARR slipped 22.2% from its 52-week high of $76.76, achieved on Jun. 25. Over the past three months, CARR stock declined 12.9%, underperforming the State Street Industrial Select Sector SPDR ETF's (XLI) marginal losses during the same time frame.

Shares of CARR rose 13% on a YTD basis, mirrors XLI's YTD gains of 13%. However, in the longer term, the stock dipped 6% over the past 52 weeks, underperforming XLI's 15.7% returns over the last year.

To confirm the bearish trend, CARR has been trading below its 50-day moving average since late July. The stock has been trading below its 200-day moving average since mid-August.

Over the past year, CARR struggled with persistent weakness in the residential and light commercial HVAC markets, where elevated distributor inventory, high interest rates, and cautious consumer spending dampened demand. These macro headwinds led to earnings misses and lowered forward guidance, offsetting strong growth in its data center cooling and aftermarket service businesses while compressing operating margins.

On Jul. 28, CARR shares fell 8.9% after reporting its Q2 results. Its adjusted EPS of $0.86 beat Wall Street expectations of $0.83. The company's revenue was $6.4 billion, exceeding Wall Street forecasts of $6 billion. CARR expects full-year adjusted EPS to be $2.90, and revenue is expected to be $23 billion.