3 Air Conditioner & Heating Stocks From a Thriving Industry

Core Viewpoint - The Zacks Building Products - Air Conditioner & Heating industry is poised for growth due to the energy transition and increasing demand for renewable energy solutions, despite inflationary pressures [1] Industry Overview - The industry includes designers, manufacturers, and marketers of products for heating, ventilation, air conditioning, and refrigeration, covering a wide range of equipment and services [2] Trends Influencing the Industry - U.S. administration's pro-environmental initiatives are driving demand for clean energy systems, benefiting companies in the industry [3] - Continuous investments in technology and e-commerce are enhancing customer experience and expanding market reach [4] - Rising costs and regulatory pressures are challenges, but the demand for maintenance and repair services provides stable revenue [5] Industry Performance - The industry ranks 54 in the Zacks Industry Rank, placing it in the top 22% of over 250 Zacks industries, indicating positive near-term prospects [6][7] - Aggregate earnings estimates for the industry have increased, reflecting growing analyst confidence in earnings growth potential [8] Stock Market Performance - The industry has outperformed the broader Zacks Construction sector and the S&P 500, with a 57.4% gain over the past year compared to 24% and 28.5% respectively [10] Current Valuation - The industry is trading at a forward P/E ratio of 33.45X, significantly higher than the S&P 500's 22.69X and the sector's 18.17X [12] Company Highlights - Comfort Systems USA, Inc. (FIX): Experienced a 127.7% stock gain over the past year, with a projected earnings growth of 20.8% for 2025 [15] - AAON, Inc. (AAON): Stock gained 85.6% over the past year, with a strong focus on expanding production capacity and a projected earnings growth of 32.2% for 2025 [19] - The AZEK Company Inc. (AZEK): Achieved a 41.9% stock gain over the past year, with expected earnings growth of 20.8% for fiscal 2025, driven by strong residential demand [22]