Johnson Controls (JCI – Research Report), the Industrials sector company, was revisited by a Wall Street analyst today. Analyst Damian Karas from UBS downgraded the rating on the stock to a Hold and gave it a $68.00 price target.
Damian Karas has given his Hold rating due to a combination of factors including Johnson Controls’ (JCI) underwhelming growth trajectory when compared to its peers and the perceived challenges it may encounter in achieving its fiscal year 2024 guidance. Karas notes the operational struggles, specifically in surpassing quarterly growth expectations, which could potentially dampen investor sentiment. Despite these concerns, JCI’s stock is trading at historical lows relative to its competitors, which may offer some support for its current valuation.
Further influencing the Hold rating is the outcome of the sum-of-the-parts (SOTP) analysis following potential divestitures, which suggests only a modest upside from these actions. Karas points out that while there has been an improvement in field orders, the short cycle Global Products business remains weak, which tempers expectations for a significant recovery in the second half of the year. With risks such as delays in potential divestitures and the potential for business underperformance during this period, the Hold rating reflects a balanced view of risk and reward, underscored by a price target of $68, which incorporates a roughly 16x multiple on forward earnings.
In another report released on May 2, Barclays also maintained a Hold rating on the stock with a $59.00 price target.
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Johnson Controls (JCI) Company Description:
Johnson Controls International plc is a diversified technology and multi-industrial company. The company’s operations include creation of intelligent buildings, air systems, HVAC controls, security and fire safety solutions, providing efficient energy solutions, integrated infrastructure, and next-generation transportation systems that work seamlessly together to deliver on the promise of smart cities and communities.
Read More on JCI:
- Johnson Controls Files Key Financial Update
- Johnson Controls price target lowered to $70 from $71 at Oppenheimer
- Johnson Controls price target lowered to $59 from $61 at Barclays
- Unusually active option classes on open May 1st
- Johnson Controls backs FY24 adjusted EPS view $3.60-$3.75, consensus $3.60
