Recent underperformance in Carrier shares could provide a buying opportunity, according to JPMorgan. The firm upgraded the stock to overweight from neutral and upped its price target to $78 from $77. That implies 25.7% upside, as of Tuesday’s close. On Tuesday, shares declined almost 2%, putting their year-to-date losses at around 9%. The move lower came after President Donald Trump’s 25% tariff on goods from Mexico — which analyst Stephen Tusa notes the company has exposure to, given the company’s “significant presence” in the country — went into effect. “The stock is trading below HVAC peers and sector and in our view is the most attractive of the top 3 premium HVAC players on a relative basis,” the analyst wrote in a note to clients dated Wednesday. “There is a high degree of uncertainty in HVAC and we do not view the guidance as conservative, but it should be doable, which means the revision cycle is over, and valuation here is now at its relative lows and stands out versus peers who face similar uncertainty, but are trading at a premium.” The stock is now more than 25% off its 52-week high and is “more attractively valued,” Tusa said. Its price-to-earnings ratio for the next 12 months currently sits at 20.16, according to FactSet. “In a sector that we view as not yet cheap enough to fully own, this one is cheap on a [sum of the parts] basis, reflective of a disconnect between the perception of fundamentals here versus peers, which should converge over time,” he also said. On the tariff front, Tusa noted that Carrier is confident it’ll be able to mitigate any impact through price increases and supply chain restructuring, if necessary. Most analysts covering Carrier are optimistic on the stock in the months ahead, based on LSEG data. Among the 26 covering it, 15 have a strong buy or buy rating. Its consensus 12-month target of nearly $81 also implies more than 30% upside from here. Shares were more than 2% higher after Tusa’s upgrade on Wednesday.
