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Johnson Controls (JCI)
:JCI
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Johnson Controls
(NYSE:JCI)75Outperform
Positive Factors
Financial Performance
Johnson Controls' operations and earnings per share exceeded expectations.
Leadership
The appointment of a new CEO, Joakim Weidemanis, is viewed positively as he has a track record of significant operating margin improvements.
Negative Factors
Financial Guidance
The guidance for F2025 is below Street estimates at the midpoint, likely due to stranded costs and better profitability in certain segments.
Johnson Controls (JCI) vs. S&P 500 (SPY)
Market Cap
$53.41B
Dividend Yield1.79%
Average Volume (3M)5.21M
Price to Earnings (P/E)30.9
Beta (1Y)1.13
Revenue Growth-4.53%
EPS Growth-14.72%
CountryUS
Employees94,000
SectorIndustrials
Sector Strength66
IndustryConstruction
Share Statistics
EPS (TTM)2.62
Shares Outstanding660,139,160
10 Day Avg. Volume4,519,801
30 Day Avg. Volume5,211,815
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.45
Price to Cash Flow (P/CF)54.80
P/FCF Ratio102.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$93.33Price Target Upside15.36% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
Johnson Controls Business Overview & Revenue Model
Company DescriptionJohnson Controls (JCI) is a global diversified technology and multi-industrial leader serving a wide range of customers in more than 150 countries. The company specializes in creating intelligent buildings, efficient energy solutions, integrated infrastructure, and next-generation transportation systems. Core products and services include building management systems, HVAC equipment, security solutions, and energy efficiency solutions.
How the Company Makes MoneyJohnson Controls generates revenue through a combination of product sales, services, and solutions primarily in the building technology and solutions sector. Key revenue streams include the sale of heating, ventilation, and air conditioning (HVAC) systems, building management systems, fire and security solutions, and energy efficiency solutions. The company also offers maintenance, repair, and retrofit services, which provide a steady stream of recurring revenue. Significant partnerships with construction firms, real estate companies, and governments further enhance its earnings potential by facilitating large-scale projects and contracts. Additionally, Johnson Controls benefits from its global presence and established brand reputation, which help to secure contracts and partnerships worldwide.
Johnson Controls Financial Statement Overview
Summary
Johnson Controls demonstrates solid financial health with strong profitability metrics, stable balance sheet, and robust cash flow generation. While recent revenue contraction is a concern, efficient cost management and strong cash flow provide a buffer. Moderate leverage and good returns on equity highlight financial stability, positioning the company well in the construction industry.Income Statement
Johnson Controls shows strong profitability with a Gross Profit Margin of 42.6% and a Net Profit Margin of 9.3% for TTM. Revenue growth is negative at -18.1%, indicating a recent decline compared to the previous year. The EBIT Margin of 11.8% and EBITDA Margin of 12.9% suggest solid operational efficiency. Overall, the company maintains strong margins despite recent revenue contraction.78
Positive
Balance Sheet
The company's balance sheet is robust with a Debt-to-Equity Ratio of 0.60, showcasing moderate leverage. The Return on Equity is impressive at 11.0%, reflecting effective utilization of equity capital. An Equity Ratio of 37.8% indicates a stable capital structure with a healthy proportion of equity in total assets.74
Positive
Cash Flow
Cash flow analysis reveals strong performance, with a Free Cash Flow of $2.075 billion showing growth from the previous period. The Operating Cash Flow to Net Income Ratio is 1.48, indicating strong cash generation relative to net income. Free Cash Flow to Net Income Ratio of 1.19 further underscores effective cash management.81
Very Positive
| Breakdown | ||
| TTM | Sep 2024 | |
|---|---|---|
| Income Statement | Total Revenue | |
| 22.28B | 22.95B | Gross Profit |
| 8.00B | 8.08B | EBIT |
| 2.39B | 2.42B | EBITDA |
| 2.79B | 2.80B | Net Income Common Stockholders |
| 1.75B | 1.71B | |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |
| 606.00M | 606.00M | Total Assets |
| 42.70B | 42.70B | Total Debt |
| 9.49B | 9.49B | Net Debt |
| 8.89B | 8.89B | Total Liabilities |
| 25.33B | 25.33B | Stockholders Equity |
| 16.10B | 16.10B | |
| Cash Flow | Free Cash Flow | |
| 2.07B | 1.60B | Operating Cash Flow |
| 2.59B | 2.10B | Investing Cash Flow |
| -249.00M | -221.00M | Financing Cash Flow |
| -3.11B | -2.08B |
Johnson Controls Technical Analysis
Neutral
80.90
Price Trends
82.22
Negative
81.29
Negative
75.50
Positive
Market Momentum
0.24
Positive
40.33
Neutral
18.43
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JCI, the sentiment is Neutral. The current price of 80.9 is below the 20-day moving average (MA) of 86.32, below the 50-day MA of 82.22, and above the 200-day MA of 75.50, indicating a neutral trend. The MACD of 0.24 indicates Positive momentum. The RSI at 40.33 is Neutral, neither overbought nor oversold. The STOCH value of 18.43 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JCI.
Johnson Controls Risk Analysis
Johnson Controls disclosed 38 risk factors in its most recent earnings report. Johnson Controls reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Johnson Controls Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $27.28B | 10.22 | 38.79% | 1.06% | -2.99% | 159.26% | |
75 Outperform | $53.41B | 30.89 | 11.01% | 1.79% | -4.53% | -14.72% | |
74 Outperform | $109.16B | 29.31 | 20.52% | 1.35% | 7.25% | 18.36% | |
74 Outperform | $64.30B | 27.12 | 9.14% | 1.80% | 10.29% | 22.72% | |
70 Outperform | $55.99B | 138.05 | 23.17% | 1.26% | 8.62% | 163.53% | |
68 Neutral | $135.18B | 23.89 | 596.13% | 2.08% | 5.05% | 2.73% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
JCI
Johnson Controls
80.90
21.79
36.86%
DOV
Dover
184.06
18.58
11.23%
ETN
Eaton
279.22
-9.15
-3.17%
EMR
Emerson Electric Company
114.03
6.95
6.49%
HON
Honeywell International
208.00
14.75
7.63%
CARR
Carrier Global
62.07
6.16
11.02%
Johnson Controls Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: 4.67% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong start to fiscal 2025 with significant growth in sales, backlog, and margins, driven by robust performance across key segments such as Global Products and Building Solutions. However, concerns about potential tariff impacts and challenges in specific verticals such as core real estate were noted. The CEO succession was also highlighted positively.Highlights
Strong Start to Fiscal 2025
Johnson Controls reported strong first-quarter results with double-digit organic sales growth of 10%, segment margin expansion of 200 basis points, and adjusted EPS up nearly 40% year-over-year.
Record-Setting Backlog
Building Solutions backlog reached record levels, growing 11% to $13.2 billion, with service backlog up 8% and system backlog up 12% year-over-year.
Significant Margin Expansion
Global Products segment saw organic sales grow 15% and EBITDA margin expand by 740 basis points to 30.1%.
Data Center Segment Recognition
Johnson Controls was named the number one implementer among data center thermal management providers and recognized as a top innovator.
Successful CEO Succession Planning
Joakim Weidemanis was announced as the successor to CEO George Oliver, bringing extensive experience from Danaher, effective March 2025.
Lowlights
Challenges in North America Building Solutions
North America Building Solutions faced a $20 million productivity drag due to investment in incremental resources to drive growth.
Uncertainty in Tariff Impact
Concerns about potential tariff impacts on pricing and margins, with uncertainty on how tariffs will affect the market and company's ability to pass on costs.
Softness in Core Real Estate Vertical
Continued softness in the core real estate vertical, particularly office spaces, with no acceleration in growth observed.
Company Guidance
During the Johnson Controls' First Quarter 2025 Earnings Call, the company announced a 16% growth in orders driven by double-digit increases in both systems and services. Organic revenue grew by 10%, and segment margin expanded by 200 basis points to 15%, leading to an adjusted EPS of $0.64, which was a 40% increase year-over-year. The company ended the quarter with $1.2 billion in available cash, and net debt decreased to 2.3 times. Johnson Controls raised its full-year guidance, expecting adjusted segment EBITDA margin to expand over 80 basis points and adjusted EPS to range between $3.50 to $3.60 per share, representing 9% to 12% growth. The company plans to maintain a free cash flow conversion of 90% or greater for the full year.Johnson Controls Corporate Events
Executive/Board Changes
Johnson Controls Announces New CEO and Leadership Changes
Neutral
Feb 5, 2025
On February 5, 2025, Johnson Controls announced the appointment of Joakim Weidemanis as the new Chief Executive Officer, succeeding George Oliver, effective March 12, 2025. This leadership transition marks a significant change in the company’s governance, with Weidemanis bringing extensive experience from Danaher Corporation. George Oliver will remain as Chairman until his retirement on July 31, 2025, after which Mark Vergnano will take over as independent Chairman. Additionally, a retention award was approved for Marc Vandiepenbeeck, the CFO, to ensure leadership stability during this transition period.
Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
Johnson Controls Announces New CEO and Strong Q1 Results
Positive
Feb 5, 2025
On February 5, 2025, Johnson Controls announced the appointment of Joakim Weidemanis as the new CEO, effective March 12, 2025. The company also reported strong fiscal first quarter 2025 results with a 4% increase in sales to $5.4 billion and a 10% rise in organic sales. This performance reflects their strategy to streamline their portfolio and strengthen their position as a leading building solutions provider, contributing to a more predictable performance and delivering value to stakeholders.
Executive/Board ChangesBusiness Operations and Strategy
Johnson Controls Announces Strategic Leadership Changes
Neutral
Jan 10, 2025
Johnson Controls announced leadership changes to enhance operational efficiency, with Julie Brandt now leading Global Field Operations and Nathan Manning taking over as Vice President and President of Building Solutions North America. This transition is part of their ongoing efforts to drive simplification and growth, impacting the company’s strategic positioning and operational dynamics.
Executive/Board ChangesShareholder Meetings
Johnson Controls Director Simone Menne to Retire in 2025
Neutral
Dec 12, 2024
Simone Menne, a member of the Board of Directors of Johnson Controls International plc, has announced her retirement effective March 12, 2025, during the 2025 Annual General Meeting of Shareholders. Her decision to retire is not due to any disagreements with the company’s operations, policies, or practices.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.