) internal catalysts remain in the Carrier Enterprise integration, but are priced in. Catalysts include the layering-in of the parts and supplies business and the implementation of a performance culture based on branch-level accountability. We believe the addition of parts is likely to take time, but could add up to $0.40 of earnings power in 2011/2012. MKM believes the company's unique franchise and potential earnings catalysts support a premium valuation relative to the peer group. However, current levels suggest that investors generally appreciate replacement cycle/Carrier catalysts. MKM appreciates the long-term story, but would await definitive signs of Carrier parts traction and/or a strong replacement cycle before becoming constructive, all else being equal. 2010 and 2011 EPS estimates of $2.47 and $3.16, respectively, are in line with consensus and are underpinned by 9% core sales growth that is reflective of the start of a replacement cycle and some realization of parts potential in Carrier Enterprise. Despite demand expectations that appear ahead of the group, it sees limited downside risk based on growth in the installed base and anticipated replacement. MKM has a Neutral rating on WSO and a $63 PT WSO closed Thursday at $58.31