May HVAC Data: Resi ~+7.5%, Light Cml ~-14%; Heat Pump Share High, But Stable

Research evidence excerpt

May HVAC Data: Resi ~+7.5%, Light Cml ~-14%; Heat Pump Share High, But Stable

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2025. We also remind investors heat pump data includes mini-split systems (which can easily be Light Cml End Market, With CARR Least

Exposed as a % of Total revenue1/3 of the cost of a whole house replacement).

LII

Gas furnace sales in May were -6.3% y/y with oil furnace sales up ~12.2% (historically choppy), WSO

albeit with heating season now well behind us. TT

CARR

Interestingly, light cml turned down ~14% y/y in May on tougher comps after being up LDD over

0% 5% 10% 15% 20%

the last 3 months. While exposures across OEMs are rather limited (Ex.2), light cml TTM rate of - % Americas Light Cml Exposure

MSD is improved from the -HSD/LDD in much of 2025 and early-2026. We note AHRI data does not .Source: Company data, Jefferies

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 four consecutive months of flat to positive resi volume growth,

appears to support an end to 'destocking' activities, but 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/slightly negative vol in 2026,

followed by a stabilization in 2027 into mid-2028, with normalization returning towards the end of

the decade as demand stabilizes and wages/prices reach equilibrium.

AHRI resi comps become significantly easier next month through the end of the year, which should result

in much stronger headline growth for 2H.