Buffett Brain · Research note
Score updated 27 Oct 2026 · analysis from 26 Jul 2026
CARR· Industrials
Carrier Global
Carrier Global's low ROIC of 5.5% and high P/E of 42.2 signal significant valuation concerns and a weak economic moat.
Buffett fit
Weak fit
Owner
26
Durability
41
Management
80
Price
5
Score updated 27 Oct 2026 · analysis from 26 Jul 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Industrials stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned Carrier Global outright, I would focus on improving operational efficiency to enhance margins, currently at a low 8.1%.
The full reasoning comes with a free account.
The 10-year test raises concerns, as the company's of 5.5% is significantly below the sector top-quintile of 13.6%.
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Management has effectively reduced share count by 0.83% over the last 5 years while maintaining a yield of 2.46%.
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With an earnings yield of 2.37% and a of 42.2, the valuation appears stretched.
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- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
- Graham, Lynch and Greenblatt on the same stock
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 15-year average of 27.26% indicates strong historical returns on equity.
- 2 has grown by 37.57% year-over-year, showcasing potential operational efficiency.
- 3Share count has decreased by 0.83% annually over the last 5 years, reflecting disciplined .
- 4All five years of profitability indicate resilience despite market challenges.
Concerns
5- 1 of 5.5% is significantly below the sector top-quintile cutoff of 13.6%, indicating a weak competitive position.
- 2 of 24.8% is far below the sector top-quintile cutoff of 43.4%, raising concerns about .
- 3 of 42.2 is excessively high, suggesting the stock is overvalued relative to earnings.
- 4Net debt/EBITDA of 3.56 indicates higher than ideal, which could pose risks during downturns.
Price history
$56.44+8.1%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Carrier Global operates in the HVAC, Refrigeration, and Fire & Security segments, generating $21.75B in revenue. The company provides essential products and services, including air conditioning, refrigeration solutions, and fire detection systems. The business model benefits from recurring maintenance and aftermarket services, which enhance cash flow stability. The unit economics are under pressure, given the low of 24.8%.
What other investors would say
The same company, judged by three other documented playbooks.
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