Unconventional Options Trading on Carrier Global Corporation Securities Due to Tariff Agreements Negotiations
In recent market activity, Carrier Global Corp. (CARR) stock has seen a 5% increase, trading at $80.58 in midday trading. This upward trend may be driven by a combination of factors, including positive trade deals and strong financial projections.
Analysts forecast an average target price of around $83.15 for CARR stock, indicating an 8.5% upside from the current price near $76.50-$76.61. The average brokerage recommendation is about a moderate buy (2.1 on a scale where lower numbers are better).
One of the key drivers of this optimistic outlook is the company's free cash flow (FCF) projections. Carrier Global Corp. expects FCF to range between $2.4 and $2.6 billion this year, implying a free cash flow margin of approximately 10.9%. This suggests healthy cash generation relative to revenue. Forecasted FCF, combined with a solid outlook, supports the stock’s valuation and potential price appreciation.
Recent trade deals appear to have sparked increased call options activity and optimism among investors. Carrier Global reaffirmed its sales guidance for 2025 at about $23 billion, up from a prior estimate of $22.5 billion. This positive update on sales guidance is contributing to rising stock price targets and bullish sentiment.
The upcoming dividend is about $0.23 per share, reflecting a steady income stream to shareholders. While the dividend yield is moderate, details on whether it is expected to grow materially were not found in the current data.
Investors should monitor confirmation of sales and free cash flow trends in upcoming earnings, as these remain key factors underpinning the current price targets and sentiment. Over 15,000 put option contracts traded at the $75.00 put option strike price for expiry at the end of 2025, indicating a potential for further gains. Using the historical dividend yield method, the price target for CARR stock is $88.70, implying a potential upside of 7.4% if the DPS remains unchanged.
However, some analysts have expressed caution, with JP Morgan recently downgrading CARR to neutral and GuruFocus estimating a one-year GF Value of about $65.18, implying a potential downside near 15%. The stock’s near-term performance will likely be influenced by the upcoming Q2 earnings report scheduled for late July 2025.
In conclusion, the outlook for CARR stock is cautiously optimistic, driven by strong trade deal momentum, solid free cash flow projections, and steady dividend payouts. Analysts mostly target prices in the low-to-mid $80s, representing moderate upside from current levels. However, some models predict downside, reflecting risks if sales or cash flow guidance disappoint. Investors are advised to closely follow the company's earnings reports and financial performance to make informed decisions.
[1] Yahoo Finance [2] MarketWatch [3] Seeking Alpha [4] GuruFocus
Investors might find opportunities in options trading based on the bullish sentiment surrounding CARR stock, given the upward trend and rising stock price targets. The positive outlook for Carrier Global Corp. also makes it an appealing investment option in the finance and business sector, particularly in the stock-market, considering its strong financial projections and free cash flow.
