Carrier Global Plunges 11% Amid Earnings Whiplash—What’s Brewing in the Climate Tech Sector?

Summary
• Carrier Global (CARR) trades at $71.38, down 10.9753% intraday as of 19:44 ET
• Q2 adjusted EPS surged 26% to $0.92, but revenue fell short of estimates at $6.11B
• Company cut residential segment guidance, citing weak summer demand and order delays

The stock’s sharp selloff follows a mixed earnings report where profit outperformed but revenue disappointed. With the Building Products sector showing volatility and CARR trading near its 52-week low, investors are scrambling to decipher whether this is a buying opportunity or a deeper fundamental shift. Johnson Controls (JCI), a sector leader, also dipped 7.9% as broader market jitters amplify.

Mixed Earnings and Guidance Cuts Spur Sharp Selloff
Despite beating adjusted EPS estimates by 26% and reporting strong free cash flow of $568M, Carrier Global’s shares collapsed after the company cut full-year residential sales guidance. The revised outlook cited a delayed summer season and weaker order growth, undermining investor confidence. While operating margins expanded 130 bps and GAAP EPS rose 56% YoY, the revenue miss of $6.11B versus $6.35B (consensus) triggered a sell-off. The market’s focus on guidance deterioration—particularly in the Residential segment—overshadowed the company’s otherwise robust operational performance.

Building Products Sector Volatility as CARR Plunges, JCI Dips 7.9%
The Building Products & Equipment sector (S&P 500) has seen mixed returns, with CARR’s 11% drop outpacing Johnson Controls’ (JCI) 7.9% decline. While CARR’s selloff is tied to specific guidance cuts, JCI’s fall reflects broader sector weakness. The sector’s 3.68% daily gain contrasts with CARR’s underperformance, highlighting divergent investor sentiment. CARR’s 13.5% discount to its 52-week high versus the sector’s 7.84% YTD return suggests a more acute near-term concern.

Options Playbook: High-Leverage Puts and Calls for CARR’s Volatile Swing
• MACD: 1.86 (bullish divergence), RSI: 73.12 (overbought), 200D MA: $70.38 (just below)
• Bollinger Bands: $72.50 (lower band), $80.56 (upper), current price at $71.38 (oversold)

CARR’s technicals suggest a potential bounce from the 200D MA and lower Bollinger Band, but its 73 RSI and 1.28% turnover rate hint at overbought conditions. Aggressive traders may target the $72.50 support or $76.53 (middle band) resistance.

Top Options Picks:
• CARR20250815P65 (Put): IV 32.24%, Leverage 357%, Delta -0.083, Theta -0.010, Gamma 0.0299, Turnover $4,276. High leverage and moderate IV make this a strong bearish play if the 52-week low ($54.22) is threatened.
• CARR20250815C70 (Call): IV 29.25%, Leverage 26.18%, Delta 0.647, Theta -0.126, Gamma 0.0799, Turnover $55,690. Strong liquidity and theta decay position this as a bullish catalyst if CARR breaks above $74.72 (intraday high).

Payoff Estimation: A 5% downside (to $67.81) would yield $7.19 profit for the 65 Put (vs. $0 for the 70 Call). Aggressive bulls may consider the 70 Call into a $75.00 retest, while bears should monitor the 65 Put for a potential 35%+ return on a $70.00 close.

Backtest Carrier Global Stock Performance
The iShares Core S&P 500 ETF (CARR) has historically shown resilience following a significant intraday plunge of at least -11%. Backtesting reveals a 57.02% three-day win rate, a 59.33% ten-day win rate, and a 58.79% thirty-day win rate, indicating a higher probability of positive returns in the short term after such events. The maximum return observed was 5.53% over thirty days, suggesting that while there may be some market churn, CARR tends to recover and even exceed its pre-plunge levels.

Take Immediate Action: CARR’s Volatility Demands Tactical Positioning
The selloff appears driven by near-term guidance fears rather than long-term fundamentals, with CARR’s 36.95 P/E still in line with its 52-week range. Watch for a $72.50 support hold and a $76.53 (middle Bollinger Band) breakout to confirm direction. For sector context, Johnson Controls’ 7.9% drop underscores broader market caution. Aggressive traders may use the 65 Put and 70 Call to capitalize on the 15% range between $67.50 and $77.50. If CARR closes above $74.72 (intraday high) by Friday, the 70 Call could unlock 15%+ gains.