Carrier Global Corp finds itself navigating a complex landscape, caught between two powerful and opposing dynamics. On one side, the company is deploying substantial capital to return value to shareholders. On the other, it confronts a significant slowdown in its core U.S. residential business. This tension has prompted market analysts to reassess their outlooks, even as major institutional investors appear to be increasing their stakes. A critical question emerges: can aggressive shareholder returns effectively counterbalance weakening fundamental demand?
Institutional Sentiment and Long-Term Vision
Despite recent operational challenges, professional investment firms have shown notable confidence. Data reveals that institutional investors hold approximately 91% of Carrier Global’s outstanding shares. In the second quarter of 2025, prominent fund Brevan Howard Capital Management significantly increased its position by 91.1%. This substantial accumulation by sophisticated market participants suggests a belief in the company’s medium-term trajectory.
Management has outlined ambitious targets for 2028, aiming for revenue of $26.7 billion and earnings of $2.9 billion. Achieving this goal implies a required compound annual growth rate (CAGR) of 5.9% in sales. Interestingly, broader market research forecasts an even higher growth rate for the U.S. air conditioning market, projecting a CAGR of roughly 6.91% through 2035. This structural industry trend presents a theoretical tailwind, though Carrier must first navigate the current cyclical downturn in its residential segment to capitalize on it.
The Weight of a Weaker Forecast
The immediate pressure stems from the company’s signaling of softer performance in its U.S. residential unit for the fourth quarter of 2025. This division is crucial, accounting for nearly half of total group revenue. In response, financial institutions have revised their models downward. RBC Capital Markets reduced its earnings per share estimates by 2% for 2025 and by 7% for 2026, indicating concerns that demand weakness may be more prolonged than initially anticipated.
This recalibration triggered a series of price target reductions in December:
* RBC cut its target from $75 to $70.
* Wolfe Research adjusted from $75 to $74.
* Wells Fargo lowered its target from $62 to $59.
Should investors sell immediately? Or is it worth buying Carrier Global Corp?
The consensus analyst rating currently stands at “Hold,” with an average price target of $72.25. The share price, trading around €45.40, has declined approximately 31.9% year-to-date, reflecting the market’s pricing in of these challenges.
Shareholder Returns Versus Operational Reality
In a clear move to bolster investor confidence, Carrier’s board has authorized a new $5.0 billion share repurchase program. This authorization is substantial, equivalent to about 10.1% of the company’s outstanding shares, and provides a mechanism for potential near-term price support. Concurrently, the company declared a quarterly cash dividend of $0.24 per share, payable on February 9, 2026. This distribution translates to an annualized yield in the range of 1.7% to 1.8%.
While these capital allocation measures can help stabilize per-share metrics and signal management’s commitment to supporting equity value, they do not address the core operational issue. As long as demand in the U.S. housing sector remains subdued, Carrier will continue to face margin compression and earnings risk.
Key Data Points
* Analyst Consensus: Average price target $72.25; Hold rating.
* Capital Actions: $5.0 billion share buyback (~10.1% of shares); $0.24 quarterly dividend (Pay Date: 09 Feb 2026).
* Ownership Structure: Institutions hold 91% of shares; notable buying activity reported in Q2 2025.
Conclusion: Navigating the Crosscurrents
In the short term, Carrier Global’s stock remains vulnerable to confirmation of the weakened demand when fourth-quarter results are published. The extensive buyback program and dividend offer a cushion but are not a remedy for the underlying operational headwinds. The pivotal factors will be whether residential demand recovers in the coming quarters and if the company can successfully execute on its growth strategy to meet its 2028 financial objectives.
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