Bank of America Securities analyst Andrew Obin reiterated a Hold rating on Johnson Controls (JCI – Research Report) yesterday and set a price target of $68.00.
Andrew Obin’s rating is based on a variety of factors that balance positive aspects against near-term uncertainties for Johnson Controls. The company’s second quarter fiscal year 2024 earnings per share (EPS) outperformed expectations, indicating a solid performance at the upper end of their guidance. However, the guidance for the third quarter was somewhat disappointing, falling below consensus estimates for EPS and revenue growth. Although the company maintained its full-year revenue and EPS outlook, there is a level of unpredictability regarding the fourth quarter ramp-up, especially concerning the residential sector and the Chinese market, which are key areas of concern for the company’s future performance.
Additionally, while Johnson Controls experienced operational alignment in the second quarter, the second half of the year presents questions around the expected growth ramp, particularly as it transitions into the fourth quarter. Despite a notable unwinding of factoring which reflects positively on the company’s balance sheet, recent charges for restructuring and product quality issues have been taken into account. The complexity of these elements, combined with a cautious 3Q revenue growth outlook compared to expectations, has led Andrew Obin to reiterate a Neutral rating, with a price objective slightly above the current trading price, acknowledging the balance between the company’s strong market position and the uncertainties that lie ahead.
In another report released today, Barclays also maintained a Hold rating on the stock with a $59.00 price target.
JCI’s price has also changed moderately for the past six months – from $49.780 to $60.470, which is a 21.47% increase.
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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.
