Carrier Growth Outlook Builds on HVAC Orders and Data Center Demand

Carrier Global Corporation CARR is entering the second half of 2026 with stronger demand signals across residential, commercial heating, ventilation and air conditioning, and data center cooling.

The investor question is whether record backlog and improving end markets can offset margin pressure, weak transportation demand and softness in China residential operations.

Carrier Orders Signal a Stronger Second Half

Carrier's second-quarter orders rose roughly 40%, while global commercial heating, ventilation and air conditioning orders increased approximately 65%.

Backlog exceeded $8 billion, up about 40% year over year and 20% sequentially. That order base supports management's expectation for mid-teens organic sales growth in the second half of 2026.

CARR Raises Its Full-Year Growth Outlook

Carrier now expects 2026 sales of approximately $23 billion, with organic sales growth in the mid-to-high-single-digit range.

Management also raised adjusted earnings guidance to about $2.90 per share. Recovering residential and light commercial demand in the Americas and Europe was a key contributor to the upgraded outlook.

Carrier Global Corporation Price and ConsensusCarrier Global Corporation Price and Consensus

Carrier Global Corporation price-consensus-chart | Carrier Global Corporation Quote

Carrier Builds Scale in Data Center Cooling

Data center demand remains one of Carrier's clearest growth drivers. Second-quarter data center orders increased more than 300%.

The company raised its 2026 data center sales forecast to approximately $2 billion from $1.5 billion. Management said the 2026 forecast is covered by backlog, while hyperscaler and colocation relationships support visibility into 2027 and beyond.

Carrier is also adding manufacturing and laboratory capacity in the United States and India. That capacity expansion should help the company serve rising demand for chillers, coolant distribution units and related cooling technologies.

CARR Expands Recurring Service Revenue

Carrier's aftermarket business also supports the growth outlook. Aftermarket sales increased at a high-single-digit rate in the first half of 2026.

The company has more than 75,000 connected chillers, about 250,000 Lynx subscriptions and roughly 110,000 chillers under long-term agreements. Connectivity, monitoring and lifecycle services can make more of Carrier's revenue recurring rather than dependent only on new equipment cycles.

For investors comparing building-efficiency and climate-systems stocks, Trane Technologies plc TT and Johnson Controls International plc JCI remain relevant reference points. Trane describes itself as a global climate innovator with HVAC, transport refrigeration and connected solutions, while Johnson Controls offers building automation and controls that connect building systems on a single platform.

Story Continues

Carrier Still Faces Margin and Market Risks

The growth story is not without constraints. Carrier's adjusted operating margin fell 190 basis points year over year to 17.2% in the second quarter.

Input-cost pressure and unfavorable business mix more than offset the benefits of volume and productivity. China residential markets and global truck and trailer sales also remain weak spots. The next test is earnings conversion. Higher commercial volume can lift sales, but Carrier still needs pricing, productivity and mix execution to translate that demand into stronger profit growth.

CARR's Signals Favor Momentum Over Style

The bottom line is that CARR's setup favors demand momentum, but the broader investment profile is uneven. Orders, backlog and data center activity support the 2026 growth outlook, while margin pressure remains the main offset.

Carrier currently sports a Zacks Rank #1 (Strong Buy). It also has a Momentum Score of B, which aligns with the improving order and estimate-revision backdrop. You can see the complete list of today's Zacks #1 Rank stocks here.

The counterweight is weaker style positioning. CARR has a Value Score of D, Growth Score of F and VGM Score of F, suggesting that the stock's appeal rests more on earnings momentum than on a broadly strong value-growth profile.

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This article originally published on Zacks Investment Research (zacks.com).

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