Where Does Johnson Controls International (JCI) Valuation Sit On Its Latest Results?
Johnson Controls International (JCI) is back in focus after reporting fiscal third quarter results, with revenue of US$6,614 million and net income of US$749 million from continuing operations.
See our latest analysis for Johnson Controls International.
Despite a slight 1-day share price return decline of 0.61% to US$139.42, Johnson Controls International has a year to date share price return of 13.99%, supported by recent earnings upgrades and data center focused product announcements that have helped deliver a 1 year total shareholder return of 35.77% and a 3 year total shareholder return of 131.85%.
If Johnson Controls International’s data center momentum has your attention, it can be useful to compare it with other infrastructure focused plays through the 34 power grid technology and infrastructure stocks.
Johnson Controls International now trades below both its analyst target price and some intrinsic value estimates, even after a strong run. Is the discount a genuine opportunity, or is the market flagging real risks that justify caution?
Most Popular Narrative: 10.2% Undervalued
The most followed narrative puts Johnson Controls International’s fair value at US$155.21 per share, above the last close of US$139.42, and anchors that view in detailed revenue, margin and valuation assumptions.
The analysts have a consensus price target of $155.21 for Johnson Controls International based on their expectations of its future earnings growth, profit margins and other risk factors.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $180.0, and the most bearish reporting a price target of just $111.0.
Want to see what sits behind that fair value gap for Johnson Controls International? The narrative leans on higher revenues, wider margins, and a richer future earnings multiple. Curious which specific forecasts and discount rate hold this together? The full breakdown spells out the numbers driving that US$155.21 figure.
Result: Fair Value of $155.21 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, Johnson Controls International still faces meaningful execution risk, particularly around its complex restructuring and reliance on Lean initiatives to support the current valuation narrative.
Find out about the key risks to this Johnson Controls International narrative.
Another View: What Johnson Controls International’s P/E Is Telling You
The fair value narrative for Johnson Controls International points to a 10.2% discount, yet the current P/E of 41.5x sits well above both the US Building industry average of 22.4x and a fair ratio of 34.9x. That premium suggests there is less margin for error if the story wobbles.
For a closer look at how this pricing gap fits into the broader valuation picture, including peer comparisons, check the See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
Not sure how to interpret the mixed sentiment around Johnson Controls International? Form your own view by weighing the potential upside against the key concerns in its 1 key reward and 3 important warning signs
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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