Carrier Global Corporation

“Carrier is a well-positioned pure-play climate control business with durable secular demand drivers — data center cooling, electrification mandates, global warming — and a growing high-margin aftermarket that strengthens the economic model over time. However, the $14B VCS acquisition at ~20x EBITDA has loaded the balance sheet with $10.3B net debt and $22B+ goodwill, leaving reported ROIC well below WACC while the European heat pump thesis is still being stress-tested against slowing policy tailwinds. At 18.8x EV/EBITDA and a 3.8% FCF yield, the market is pricing a successful VCS integration and continued margin expansion with little margin of safety. The unquantified AFFF litigation retained from divestitures and thin insider alignment add to the caution. This is a business worth owning at the right price — that price is meaningfully below $67.”