Value
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.5 |
| P/S | 8.4 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 5.5 |
| PEG | 4.7 |
| Analyst target | 3.0 |
- ▸Forward P/E: 23.1x
- ▸PEG: 1.78
CARR · Why this verdict
Why Carrier Global (CARR) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score3.9/10
ConfidenceHIGH
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
This building products company has reached its analyst price target with effectively no remaining upside, and business quality falls below the minimum acceptable threshold — free cash flow converts at only 65% of net income, there is no identifiable competitive moat, and options positioning is extremely defensive with a put/call ratio near 48. The setup does not support holding.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Business quality falls below the minimum acceptable threshold, with free cash flow converting at only 65% of net income, no identifiable competitive moat, and weak returns on both assets and equity — the earnings base lacks the reliability and defensibility that justifies carrying a position through the full risk cycle. Quality breakdown | If quality improves, free cash flow conversion should rise above 85% of net income and return on assets should show meaningful sequential improvement for 2 consecutive quarters. | →Stable |
| CounterThe company beat earnings estimates in three of the last four quarters, most recently beating by 12% in April 2026, and technical momentum is strong — golden cross, RSI at 68, rising on-balance volume — indicating the market is currently rewarding execution over quality metrics. | ||
The stock has reached its analyst price target with the reward-to-risk ratio turning negative — downside to the support level is approximately 14 times larger than the remaining upside — making the current entry geometry unfavorable regardless of near-term momentum. Warnings | If this concern resolves, analysts should raise their consensus price target by more than 10% above the current level within one quarter, restoring meaningful upside headroom. | →Stable |
| CounterStrong near-term momentum — above all moving averages with rising volume accumulation — could push the stock beyond current targets if analysts revise estimates upward following continued earnings beats. | ||
The put/call ratio of approximately 48 is extraordinarily elevated, reflecting heavy institutional hedging against a meaningful pullback from current levels — a signal that sophisticated market participants are positioning defensively even as price action looks constructive. Risk breakdown | If this concern proves unfounded, the put/call ratio should normalize below 5.0 over the next quarter as hedges expire without being exercised. | →Stable |
| CounterExtremely high put/call ratios can occasionally be a contrarian sentiment signal — maximum pessimism that precedes a short-covering rally — and abnormal open interest distributions can distort this metric. | ||
With approximately 52% of revenue derived from international operations, the business carries meaningful geographic concentration that introduces currency and demand volatility beyond what a domestically focused operator would face. Risk breakdown | If this risk materializes, international segment revenue should decline more than 5% year-over-year for 2 consecutive quarters, disproportionately dragging on total revenue growth. | →Stable |
| CounterGeographic diversification can also act as a partial hedge — international revenues may hold up or accelerate if domestic conditions weaken while overseas markets remain resilient. | ||
Business quality falls below the minimum acceptable threshold, with free cash flow converting at only 65% of net income, no identifiable competitive moat, and weak returns on both assets and equity — the earnings base lacks the reliability and defensibility that justifies carrying a position through the full risk cycle.
→StableQuality breakdown
- Expectation
- If quality improves, free cash flow conversion should rise above 85% of net income and return on assets should show meaningful sequential improvement for 2 consecutive quarters.
CounterThe company beat earnings estimates in three of the last four quarters, most recently beating by 12% in April 2026, and technical momentum is strong — golden cross, RSI at 68, rising on-balance volume — indicating the market is currently rewarding execution over quality metrics.
The stock has reached its analyst price target with the reward-to-risk ratio turning negative — downside to the support level is approximately 14 times larger than the remaining upside — making the current entry geometry unfavorable regardless of near-term momentum.
→StableWarnings
- Expectation
- If this concern resolves, analysts should raise their consensus price target by more than 10% above the current level within one quarter, restoring meaningful upside headroom.
CounterStrong near-term momentum — above all moving averages with rising volume accumulation — could push the stock beyond current targets if analysts revise estimates upward following continued earnings beats.
The put/call ratio of approximately 48 is extraordinarily elevated, reflecting heavy institutional hedging against a meaningful pullback from current levels — a signal that sophisticated market participants are positioning defensively even as price action looks constructive.
→StableRisk breakdown
- Expectation
- If this concern proves unfounded, the put/call ratio should normalize below 5.0 over the next quarter as hedges expire without being exercised.
CounterExtremely high put/call ratios can occasionally be a contrarian sentiment signal — maximum pessimism that precedes a short-covering rally — and abnormal open interest distributions can distort this metric.
With approximately 52% of revenue derived from international operations, the business carries meaningful geographic concentration that introduces currency and demand volatility beyond what a domestically focused operator would face.
→StableRisk breakdown
- Expectation
- If this risk materializes, international segment revenue should decline more than 5% year-over-year for 2 consecutive quarters, disproportionately dragging on total revenue growth.
CounterGeographic diversification can also act as a partial hedge — international revenues may hold up or accelerate if domestic conditions weaken while overseas markets remain resilient.
Per-dimension breakdown
Quality
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.3 |
| ROA | 2.1 |
| Gross margin | 1.0 |
| Op margin | 2.6 |
| Net margin | 3.0 |
| Current ratio | 4.2 |
| FCF quality | 5.0 |
| Moat | 3.8 |
| Piotroski F | 4.4 |
- ▸Earnings quality warning: 65% FCF/NI
- ▸No competitive moat
Growth
1.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.1 |
| EPS growth | 0.0 |
Momentum
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| Price target | 5.0 |
| erm sentiment | 5.0 |
Insider
3.5/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| holder change | 5.1 |
- ▸Heavy insider selling — $749,999,974 (1.219% of mkt cap)
Peer rank
2.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.5 |
| quality rank | 2.7 |
| growth rank | 3.7 |
Technical
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.2 |
| 52w position | 9.1 |
| gap | 5.0 |
Risk (lower is worse)
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.8 |
| days to cover | 8.4 |
| volatility | 4.2 |
| put call | 0.0 |
| implied vol | 5.2 |
| beta | 5.7 |
| debt equity | 5.5 |
- ▸Elevated put/call: 21.61
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 5.9 |
| dividend safety | 5.0 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 130.0%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- MOMENTUM:6.8>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:32d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.7=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.69
Upside
-10.3%
Downside
15.0%
Sizing output
AVOID
SetupBREAKOUT — Golden cross, above all MAs, RSI 67, MACD bullish
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — Beta 1.34>1.3
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Momentum at 6.8 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:-0.7=NEGATIVE.
The strongest dimensions are Momentum at 6.8, Sentiment at 6.0, and Catalyst at 5.5; the weakest are Growth at 1.6, Peer rank at 2.5, and Quality at 3.3. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.69 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Business quality falls below the minimum acceptable threshold, with free cash flow converting at only 65% of net income, no identifiable competitive moat, and weak returns on both assets and equity — the earnings base lacks the reliability and defensibility that justifies carrying a position through the full risk cycle.
Trip ifFree cash flow conversion rises above 90% of net income for 2 consecutive quarters.
- P2The stock has reached its analyst price target with the reward-to-risk ratio turning negative — downside to the support level is approximately 14 times larger than the remaining upside — making the current entry geometry unfavorable regardless of near-term momentum.
Trip ifAnalyst consensus price target increases more than 10% above the current level of $71.13 within one quarter.
- P3The put/call ratio of approximately 48 is extraordinarily elevated, reflecting heavy institutional hedging against a meaningful pullback from current levels — a signal that sophisticated market participants are positioning defensively even as price action looks constructive.
Trip ifPut/call ratio falls below 5.0 for 4 consecutive weeks.
- P4With approximately 52% of revenue derived from international operations, the business carries meaningful geographic concentration that introduces currency and demand volatility beyond what a domestically focused operator would face.
Trip ifInternational segment revenue grows more than 5% year-over-year for 2 consecutive quarters.