CARR vs LII: Which Is the Better Buy in 2026?

Same yardstick, side by side (as of October 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.

Reading it: LII is the cheaper of the two on forward earnings, but cheaper is not the same as better. Pair the valuation with growth (how far the forward P/E sits below the trailing P/E) and risk (beta) before you decide.

The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. CARR and LII share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.

This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined CARR and LII exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.

Carrier Global Corporation is a global leader in intelligent climate and energy solutions. After spinning off from United Technologies in 2020, it sold its Fire & Security and Commercial Refrigeration businesses and acquired Viessmann Climate Solutions in 2024 to become a pure-play climate company. Its portfolio spans HVAC, refrigeration and cold chain transportation through brands including Carrier, Viessmann, Toshiba, Automated Logic and Carrier Transicold. The business is organized into four segments: Climate Solutions Americas, Climate Solutions Europe (home to Viessmann), Climate Solutions Asia Pacific Middle East Africa, and Climate Solutions Transportation. Full year 2025 net sales were roughly $21.75 billion, and trailing twelve-month revenue reached about $22.1 billion by mid-2026.

Full CARR guide

Lennox International designs, manufactures, and distributes heating, ventilation, air conditioning, and refrigeration (HVACR) equipment across North America under the flagship Lennox brand and related labels. The business runs in two segments: Home Comfort Solutions (residential furnaces, air conditioners, heat pumps, and related equipment sold largely through dealers and distributors) and Building Climate Solutions (commercial rooftop units, controls, and refrigeration for light-commercial customers such as retailers, restaurants, and convenience stores). A large share of demand is replacement rather than new construction, which gives the model a more stable, recurring feel than pure cyclicals, and the company has leaned on manufacturing efficiency, direct-to-dealer distribution, and pricing to expand margins over time.

Full LII guide

Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.

• CARR drivers: Data center cooling boom; Heat pumps and electrification of heat.
• LII drivers: Replacement demand and installed base; Regulatory tailwinds and product mix.

A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: Residential and light commercial HVAC is cyclical and sensitive to housing activity, interest rates and consumer spending, and organic revenue has recently been roughly flat to slightly negative. For LII, residential demand is the immediate risk: Home Comfort Solutions revenue fell about 7% in the second quarter of 2026, segment profit fell about 12%, and management cut full-year EPS guidance to $23 to $24, which sent the shares down nearly 21% in a day.

Growth-minded investors who believe the theme has years to run tend to accept the richer multiple for more upside; value-minded investors lean toward the cheaper forward earnings and steadier profile. Pick CARR if you believe its drivers more; LII if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the CARR and LII guides.

CARR. As of October 16, 2026 CARR traded near $55 with a market cap around $46 billion, down from about $58 billion in July. The trailing GAAP P/E near 40x overstates the multiple because GAAP earnings carry charges, while the forward P/E of about 17x on 2027 consensus EPS near $3.31 is well below where the stock traded in the summer. Q2 2026 beat on revenue and EPS, and the valuation now leans on data center and commercial HVAC growth continuing while the residential cycle recovers.

LII. At about $360 a share, Lennox trades near 16 times trailing earnings and 14 times the 2027 EPS consensus of about $25.80, a sharp de-rating from the mid-20s multiple it carried in mid-2026. The drop came from the July guidance cut and weaker residential volumes rather than a collapse in profitability, since operating margin stayed near 23%. The analyst mean target of about $449 sits above the current price, but the consensus rating has slipped to Hold.

Headline figures (approximate, October 2026): CARR shows revenue (ttm) ~$22.1B, q2 2026 revenue ~$6.35B, up ~3.9% YoY, adjusted eps (q2 2026) $0.86 vs ~$0.82 est., net income (ttm) ~$1.17B (~5.5% margin); LII shows revenue (ttm) ~$5.3B, q2 2026 revenue growth (yoy) ~3% (commercial ~+24%, residential ~-7%), operating margin ~23%, net income (ttm) ~$789M.

CARR and LII are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined CARR and LII exposure against your real portfolio. It is not an investment adviser.