Carrier Global Corp (CARR) Financial Statements

Carrier Global's financial profile presents significant challenges when assessed through the GoodMoat Quality Indicators. Revenue growth is negative at -6.0% YoY, which is a weak indicator and fails the framework's preference for consistent, double-digit growth. Profitability metrics are low, with a GAAP profit margin of 6.8% and an operating margin of 8.8%. While the company is GAAP profitable, these margins are thin and do not suggest a high-quality, high-return business. The ROE of 10.8% is below the framework's high-quality threshold of 15-20%, indicating returns are not significantly above its cost of capital. The free cash flow yield of 4.3% translates to a P/FCF of approximately 23x, which is not low relative to the company's negative growth rate. The balance sheet shows moderate leverage with a Debt/Equity ratio of 0.89. While not excessively high, it does not meet the framework's strong preference for a substantial net cash position and Debt/EBITDA below 1.0x. Overall, the financial quality is unfavourable, with weak scores in revenue growth, profitability margins, and return metrics, offset only by positive but not exceptional free cash flow generation. The high P/E of 33.6 on negative growth is a major red flag from a valuation perspective. Analysis based on data as of 2024-05-15.