In a report released today, Noah Kaye from Oppenheimer maintained a Buy rating on Johnson Controls (JCI), with a price target of $39. The company’s shares closed yesterday at $34.78.
Kaye said:
“JCI announced an agreement to sell Partners, concluding the strategic review begun in March. Among the positives we see: (1) the transaction multiple was reasonable, in our view; (2) projected tax leakage was better than we had feared; (3) management was constructive on deploying sale proceeds for acquisitions. However, without accretive deal-making, the Power sale will be materially dilutive to JCI’s earnings/FCF, even with buybacks and corporate savings. Executing M&A to bolster the core Buildings portfolio becomes a key investor focus and a potential catalyst for the shares. We revise our estimates to reflect Power as discontinued operations and provide a pro forma statement for continuing operations. Our price target goes to $39 (from $44).”
According to TipRanks.com, Kaye is a 4-star analyst with an average return of 3.3% and a 53.4% success rate. Kaye covers the Basic Materials sector, focusing on stocks such as Advanced Disposal Services Inc, Waste Connections Inc, and Republic Services.
Currently, the analyst consensus on Johnson Controls is a Hold with an average price target of $39.17.
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Based on Johnson Controls’ latest earnings release for the quarter ending September 30, the company reported a quarterly revenue of $8.37 billion and net profit of $771 million. In comparison, last year the company earned revenue of $8.14 billion and had a net profit of $875 million.
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Johnson Controls International Plc engages in the provision of buildings products, energy solutions, integrated infrastructure and next generation transportation systems. Its technology and service capabilities include fire, security, HVAC, power solutions and energy storage to serve various end markets including large institutions, commercial buildings, retail, industrial, small business and residential. The company was established in 1885 and is headquartered in Cork, Ireland.
