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Here's Why it is Appropriate to Retain Johnson Controls Stock Now
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Johnson Controls International plc (JCI - Free Report) is benefiting from solid momentum in its Building Solutions North America and Building Solutions Europe, Middle East, Africa/Latin America (EMEA/LA) segments. Solid demand for heating, ventilation and air conditioning (HVAC) platform in data centers and strength in controls businesses are driving the Building Solutions North America segment. The increase in demand for HVAC platforms across Latin America and Middle East regions and strength in systems and service businesses are supporting the Building Solutions EMEA/LA segment.
The company has been expanding its suite of digital services and offerings to include connected chillers, industrial refrigeration equipment, connected controls and BAS systems. The digital integration of OpenBlue with Johnson Controls' core building systems should optimize the performance of the full HVAC system. Within the OpenBlue platform, Net Zero Buildings as a Service offering, which includes a full portfolio of sustainability products tailored for various segments, boosts the company’s long-term prospects.
JCI has been strengthening its business through acquisitions. The acquisition of digital workplace management and Internet of Things solutions provider, FM: Systems, in July 2023 expanded OpenBlue’s digital buildings offerings, adding cloud-based software as a service to digital workplace management capabilities.
Its measures to reward its shareholders are encouraging. In the first nine months of fiscal 2024, Johnson Controls paid a dividend worth $753 million (up 3.3% year over year) to its shareholders. The company also repurchased shares worth $876 million (up 42.9%) in the same period.
JCI Stock’s Price Performance
Image Source: Zacks Investment Research
In the year-to-date period, this Zacks Rank #3 (Hold) company’s shares have gained 22.8% compared with the industry’s 20.7% growth.
However, the company is experiencing weakness across its Building Solutions Asia Pacific segment. In the face of challenging market conditions, the segment witnessed continued weakness in system sales in China in the fiscal third quarter. The segment’s sales plummeted 22% in the third quarter of fiscal 2024 (ended June 2024).
Johnson Controls expects economic conditions in China to remain soft throughout the remaining of fiscal 2024 (ending September 2024), which is likely to impact the performance of the segment in the near term.
The company’s weak liquidity position also raises concerns. Exiting the fiscal third quarter, it had cash and cash equivalents of $862 million, much less than the short-term debt and current portion of long-term debt of $2.5 billion.
YOU delivered a trailing four-quarter average earnings surprise of 56.7%. In the past 60 days, the Zacks Consensus Estimate for Clear Secure’s 2024 earnings has increased 18.3%.
Allegion plc (ALLE - Free Report) presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter average earnings surprise of 10.3%.
In the past 60 days, the Zacks Consensus Estimate for ALLE’s 2024 earnings has increased 2.4%.
Ferguson Enterprises Inc. (FERG - Free Report) currently carries a Zacks Rank of 2. FERG delivered a trailing four-quarter average earnings surprise of 2.6%.
In the past 60 days, the consensus estimate for Ferguson’s fiscal 2025 earnings has remained steady.
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Here's Why it is Appropriate to Retain Johnson Controls Stock Now
Johnson Controls International plc (JCI - Free Report) is benefiting from solid momentum in its Building Solutions North America and Building Solutions Europe, Middle East, Africa/Latin America (EMEA/LA) segments. Solid demand for heating, ventilation and air conditioning (HVAC) platform in data centers and strength in controls businesses are driving the Building Solutions North America segment. The increase in demand for HVAC platforms across Latin America and Middle East regions and strength in systems and service businesses are supporting the Building Solutions EMEA/LA segment.
The company has been expanding its suite of digital services and offerings to include connected chillers, industrial refrigeration equipment, connected controls and BAS systems. The digital integration of OpenBlue with Johnson Controls' core building systems should optimize the performance of the full HVAC system. Within the OpenBlue platform, Net Zero Buildings as a Service offering, which includes a full portfolio of sustainability products tailored for various segments, boosts the company’s long-term prospects.
JCI has been strengthening its business through acquisitions. The acquisition of digital workplace management and Internet of Things solutions provider, FM: Systems, in July 2023 expanded OpenBlue’s digital buildings offerings, adding cloud-based software as a service to digital workplace management capabilities.
Its measures to reward its shareholders are encouraging. In the first nine months of fiscal 2024, Johnson Controls paid a dividend worth $753 million (up 3.3% year over year) to its shareholders. The company also repurchased shares worth $876 million (up 42.9%) in the same period.
JCI Stock’s Price Performance
Image Source: Zacks Investment Research
In the year-to-date period, this Zacks Rank #3 (Hold) company’s shares have gained 22.8% compared with the industry’s 20.7% growth.
However, the company is experiencing weakness across its Building Solutions Asia Pacific segment. In the face of challenging market conditions, the segment witnessed continued weakness in system sales in China in the fiscal third quarter. The segment’s sales plummeted 22% in the third quarter of fiscal 2024 (ended June 2024).
Johnson Controls expects economic conditions in China to remain soft throughout the remaining of fiscal 2024 (ending September 2024), which is likely to impact the performance of the segment in the near term.
The company’s weak liquidity position also raises concerns. Exiting the fiscal third quarter, it had cash and cash equivalents of $862 million, much less than the short-term debt and current portion of long-term debt of $2.5 billion.
Stocks to Consider
Some better-ranked companies are discussed below.
Clear Secure, Inc. (YOU - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
YOU delivered a trailing four-quarter average earnings surprise of 56.7%. In the past 60 days, the Zacks Consensus Estimate for Clear Secure’s 2024 earnings has increased 18.3%.
Allegion plc (ALLE - Free Report) presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter average earnings surprise of 10.3%.
In the past 60 days, the Zacks Consensus Estimate for ALLE’s 2024 earnings has increased 2.4%.
Ferguson Enterprises Inc. (FERG - Free Report) currently carries a Zacks Rank of 2. FERG delivered a trailing four-quarter average earnings surprise of 2.6%.
In the past 60 days, the consensus estimate for Ferguson’s fiscal 2025 earnings has remained steady.