Carrier Global Plunges 3.5%—Is the Heat Pump Hype Cooling Off?

Summary
• CARR tumbles to $69.13, a 3.5% drop from its 2025 open
• RBC slashes price target to $87, citing weak Q3 guidance
• Earnings beat of 2 cents masks 13% shortfall in residential Americas volume

Carrier Global’s stock is under pressure as analysts recalibrate expectations amid mixed operational updates. The Building Products sector remains in flux, with CARR trading near its 52-week low of $54.22. Intraday volatility sees the stock oscillating between $69.065 and $71.45, with heavy turnover of 4.07 million shares. This sharp selloff raises urgent questions about the sustainability of its recent earnings-driven optimism.

Heat Pump Hype Meets Reality Check
The selloff is rooted in RBC Capital’s revised price target and third-quarter guidance that fell 13% below consensus. Despite a 2-cent EPS beat and 45% growth in Americas Commercial HVAC, the firm flagged a 2% operating beat as insufficient to offset a pre-buy destocking hit in residential Americas. Analysts now highlight that while German heat pump markets and data center traction offer long-term hope, near-term execution risks—particularly in North American residential demand—have spooked investors. RBC’s Outperform rating remains intact, but its $87 target reflects a 20% discount to the 52-week high of $83.32.

Building Products Sector Mixed as JCI Gains Ground
The Building Products sector remains fragmented, with Johnson Controls (JCI) bucking the trend by rising 1.15%. While CARR’s 3.5% decline reflects sector-specific headwinds, broader industry dynamics—such as the EU-U.S. trade framework and rising construction costs—have created a divergent landscape. CARR’s struggles are tied to its exposure to North American residential HVAC, whereas JCI’s diversified portfolio of commercial and industrial solutions has insulated it from the same pressures.

Options Playbook: Navigating the Volatility
• RSI: 38.86 (oversold territory)
• MACD: 1.23 (bearish histogram)
• Bollinger Bands: 69.06–72.11 (current price near lower band)
• 200D MA: 70.34 (price below key support)

CARR’s technicals suggest a short-term rebound is possible but remains capped by weak fundamentals. The stock is trading below its 200-day average and near the lower Bollinger band, with RSI approaching oversold levels. However, the MACD histogram’s negative divergence signals lingering bearish momentum. For options traders, two contracts stand out:

• CARR20250815P65: Put option with 313.59% leverage ratio, 24.58% IV, and high gamma (0.0545). A 5% downside move (to $65.67) would yield a $3.46 profit, or 247% return on the $1.40 premium. This contract offers asymmetric risk-reward for bears.
• CARR20250815C67.5: Call option with 20.91% leverage, 41.33% IV, and strong liquidity (34,406 turnover). A rebound above $70 would trigger gamma-driven acceleration, but the 28.42% price decline so far limits upside. Bulls should watch for a retest of the $70 level.

Bears eye the 65 put for a 313.59% upside if CARR breaks below $69.065.

Backtest Carrier Global Stock Performance
The iShares Core S&P 500 ETF (CARR) has historically shown resilience following a -4% intraday plunge. The 3-day win rate is 56.72%, the 10-day win rate is 59.48%, and the 30-day win rate is 58.62%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest period was 5.52%, suggesting that CARR can recover from significant dips.

Act Now: Capitalize on CARR’s Volatility
CARR’s near-term trajectory hinges on its ability to stabilize residential Americas volume and deliver on Viessmann synergies. While the stock’s 3.5% drop has pushed RSI toward oversold levels, the MACD histogram’s bearish divergence warns of prolonged pressure. Investors should monitor the $69.065 intraday low as a critical support level. Meanwhile, Johnson Controls (JCI) remains a sector outperformer, up 1.15% today, offering a contrast to CARR’s struggles. For aggressive traders, the CARR20250815P65 put presents a compelling risk-reward setup if the stock breaks below key support.