Analysts at Bank of America had a second look at Carrier Global (NYSE:CARR) and decided the company, which produces heating, ventilation, and air-conditioning equipment, would Underperform. The analysts pointed to market factors in the U.S. and Europe as backing for their downgrade.
In particular, the analyst pointed to signs that the demand for the company’s products could weaken going forward. “The European heat-pump market is slowing near term as various countries push or dilute green incentives and regulations,” Andrew Obin, an analyst at BofA, said in an October 5 report.
Andrew continued that demand for light-commercial HVAC in the U.S. has also normalized after a previous spike in demand. Furthermore, he said the construction market in Europe has slowed down and is forecast to shrink.
The construction market in Europe is significant for Carrier as it plans to acquire the heat pump and boiler business of Germany’s Viessman Group. The acquisition is valued at around $13.2 billion.
While the planned acquisition is good for business, the timing and location aren’t. Germany is one of the countries experiencing a decline in demand for heat pumps. BofA also cut its price target for the company from $62 to $55 a share.
What is the Target Price for Carrier Global Stock?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on Carrier Global stock based on six Buys, eight Holds, and one Sell assigned in the past three months, as indicated by the graphic above. Furthermore, the average price target of $59.64 per share implies 10.75% upside potential.
