April HVAC Data: Resi +MSD, Light Cml +LDD; Heat Pump Share High, But Stable

Research evidence excerpt

April HVAC Data: Resi +MSD, Light Cml +LDD; Heat Pump Share High, But Stable

in our view. Heat pumps also faced very tough comps Light Cml End Market, With CARR Least

Exposed as a % of Total revenuethis month, growing 19% in Apr 2025. We also remind investors heat pump data also includes mini-

split systems (which can easily be 1/3 of the cost of a whole house replacement). LII

WSO

Gas furnace sales in April were -4.9% y/y with oil furnaces up ~32% (historically choppy), albeit with TT

heating season now well behind us. CARR

0% 5% 10% 15% 20%

Interestingly, light cml has been up LDD over the last three months (Apr/Mar/Feb), following an % Americas Light Cml Exposure

extended period of declines which started in Aug 2022. While exposures across OEMs are rather .Source: Company data, Jefferies

limited (Ex.2), this could provide some upside as resi (especially AC only) likely remains weaker

through 1H. We note AHRI data does not capture services or the applied market where we see extended

customer backlogs.

Our Resi Call: Destocking Done; Still Anemic Growth Through 2028. Commentary post the 1Q

reporting season in addition to three consecutive months of flat to positive resi volume growth

appear to support an end to 'destocking' activities. Still, we remain cautious on the underlying

end market growth given record pricing, persistently weak housing markets, and multiple years of

COVID-era pull-forward (~4–5mn units effectively 'pulled forward' from 2021–2025). We continue

to be supportive of our prior analysis (HERE) which indicates ~flat to slightly negative volumes in

2026, followed by a stabilization phase in 2027 into mid 2028, with normalization returning towards

the end of the decade as demand stabilizes and wages/price reach equilibrium.