Carrier Global Corporation

This is our first report on global HVAC major, Carrier Global Corporation. The company continues to deliver strong and consistent results in this quarter as well and managed another all-around beat. On the heels of the continued traction on pricing, Carrier delivered quite high organic sales growth in the quarter, and importantly, it continues delivering double-digit aftermarket organic growth. With supply chains generally improving, Carrier Global generated strong free cash flow. It has increased the dual sourcing for the critical components, and there has been a meaningful improvement in supplier on-time delivery. Through collaborations with prominent international organizations, Carrier advanced its Cold Chain Development all over Africa. Secular trends continue driving sticky customer demand. Carrier established its Tennessee facility as its center of excellence in the North American heat pump center. It continues to benefit from its shift to electrification in its truck trailer business with robust traction on its innovative vector equal units. Among other major updates, the company completed the acquisition of the global light commercial and residential HVAC business of Toshiba. Also, there has been important progress on integration, and it is starting to realize synergies. We initiate coverage on the stock of Carrier Global Corporation with a ‘Hold’ rating.