Diamond Hill Capital Management, LLC on Carrier Global Corporation
Thesis
Diamond Hill continues to see long-term potential in Carrier despite a weak quarter for the shares. Revenue growth exceeded expectations, but inflation and tariffs hurt margins. The stock was also pressured by high interest rates that could delay a residential heating-and-cooling recovery and by questions about data-center demand. The manager believes Carrier can still increase market share and improve margins over the longer term.
“we believe Carrier is well positioned to gain market share and improve margins long term.”
Key risks
- Tariffs and inflation have weakened margins
- Higher interest rates could delay a residential HVAC recovery
- Concern about the sustainability of data-center spending