Carrier Global: Talk of Fire and Security Sale Swirls; Our Fair Value Estimate Is Unchanged

The Wall Street Journal reported on April 11 that Carrier is considering selling or spinning off its fire and security segment. That said, it noted that this business review is in the early stages and there is no guarantee the company will follow through with such a transaction. We are maintaining our narrow moat rating and $48 per share fair value estimate for Carrier. We would not expect to make a transaction-related fair value adjustment until either a sale agreement (with a purchase price) is announced or upon completion of a spinoff transaction. If management decides to move forward with a divestiture, it wouldn’t likely close until 2024, in our view.