What Our Analysts Know About Johnson Controls International

Now trading at a price of $62.04, Johnson Controls International has moved -2.4% so far today.

Johnson Controls International returned gains of 16.0% last year, with its stock price reaching a high of $70.43 and a low of $48.82. Over the same period, the stock outperformed the S&P 500 index by 6.0%. More recently, the company's 50-day average price was $65.89. Johnson Controls International plc, together with its subsidiaries, engages in engineering, manufacturing, commissioning, and retrofitting building products and systems in the United States, Europe, the Asia Pacific, and internationally. Based in Cork, Ireland, the large-cap Industrials company has 100,000 full time employees. Johnson Controls International has offered a 2.3% dividend yield over the last 12 months.

Shareholders Are Confronted With a Declining EPS Growth Trend:

2019-11-21 2020-11-16 2021-11-15 2022-11-15
Revenue (MM) $23,968 $22,317 $23,668 $25,299
Gross Margins 32.1% 33.2% 34.0% 33.0%
Operating Margins 6.0% 7.8% 11.8% 9.5%
Net Margins 23.67% 2.83% 6.92% 6.06%
Net Income (MM) $5,674 $631 $1,637 $1,532
Net Interest Expense (MM) -$350 -$231 -$206 -$213
Depreciation & Amort. (MM) -$825 -$822 -$845 -$830
Earnings Per Share $6.49 $0.84 $2.27 $1.99
EPS Growth n/a -87.06% 170.24% -12.33%
Diluted Shares (MM) 874 754 721 686
Free Cash Flow (MM) $2,302 $2,795 $2,979 $2,455
Capital Expenditures (MM) -$559 -$316 -$428 -$465
Net Current Assets (MM) -$9,065 -$12,229 -$13,139 -$13,071
Current Ratio 1.37 1.22 1.1 1.04
Long Term Debt (MM) $6,708 $7,526 $7,506 $7,426
Net Debt / EBITDA 0.62 3.72 3.52 2.68

Johnson Controls International has stable revenues and decreasing reinvestment in the business, weak operating margings with a positive growth rate, and significant leverage. We also note that the company has a steady stream of strong cash flows working in its favor. However, the firm suffers from slimmer gross margins than its peers and declining EPS growth.

A Lower P/B Ratio Than Its Sector Average but Trades Above Its Graham Number:

Johnson Controls International has a trailing twelve month P/E ratio of 33.1, compared to an average of 20.49 for the Industrials sector. Based on its EPS guidance of $4.06, the company has a forward P/E ratio of 16.2. The -9.0% compound average growth rate of Johnson Controls International's historical and projected earnings per share yields a PEG ratio of -3.7. This indicates that its shares are overvalued.In contrast, the market is likely undervaluing Johnson Controls International in terms of its equity because its P/B ratio is 2.59 while the sector average is 3.78. The company's shares are currently trading 56.8% above their Graham number. In conclusion, Johnson Controls International's impressive cash flow trend, decent P/B ratio, and reasonable use of leverage demonstrate that the company may still be fairly valued — despite its elevated earnings multiple.

Johnson Controls International Has an Average Rating of Buy:

The 18 analysts following Johnson Controls International have set target prices ranging from $58.0 to $80.0 per share, for an average of $74.06 with a buy rating. As of April 2023, the company is trading -11.0% away from its average target price, indicating that there is an analyst consensus of some upside potential.

Johnson Controls International has a very low short interest because 0.8% of the company's shares are sold short. Institutions own 93.5% of the company's shares, and the insider ownership rate stands at 0.25%, suggesting a small amount of insider investors. The largest shareholder is Dodge & Cox Inc, whose 9% stake in the company is worth $3,860,162,172.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.