Does Johnson Controls International plc (JCI) offer a good opportunity for investors?

Johnson Controls International plc (NYSE: JCI) stock fell -0.67% on Friday to $53.76 against a previous-day closing price of $54.12. With 4.22 million shares changed hands, the volume of the stock remained lighter than its average volume of 4.87 million shares. During the session, the Engineering & Construction company that operates in wider Industrials sector, reached to the highest price of $54.58 whereas the lowest price it dropped to was $53.61. The 52-week range on JCI shows that it touched its highest point at $81.77 and its lowest point at $45.52 during that stretch. It currently has a 1-year price target of $62.32. With its current market cap of 35.87 billion, JCI has annualized dividend of $1.40 while the current yield stands at 2.60%. Beta for the stock currently stands at 1.19.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of JCI was up-trending over the past week, with a rise of 6.71%, but this was up by 10.89% over a month. Three-month performance dropped to -12.66% while six-month performance fell -26.02%. The stock lost -23.96% in the past year, while it has lost -33.88% so far this year. A look at the trailing 12-month EPS for JCI yields 1.73 with Next year EPS estimates of 3.63. For the next quarter, that number is 0.85. This implies an EPS growth rate of 150.60% for this year and 21.54% for next year. EPS is expected to grow by 15.91% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 13.90%.

Float and Shares Shorts:

At present, 699.10 million JCI shares are outstanding with a float of 687.27 million shares on hand for trading. On Jul 14, 2022, short shares totaled 7.43 million, which was 1.07% higher than short shares on Jun 14, 2022. In addition to Mr. George R. Oliver as the firm’s Chairman & CEO, Mr. Olivier C. Leonetti serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 96.01% of JCI’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 61.05% of JCI, in contrast to 29.83% held by mutual funds. Shares owned by individuals account for 0.71%. As the largest shareholder in JCI with 8.95% of the stake, Dodge & Cox holds 62,254,487 shares worth 62,254,487. A second-largest stockholder of JCI, Wellington Management Co. LLP, holds 57,842,396 shares, controlling over 8.32% of the firm’s shares. The Vanguard Group, Inc. is the third largest shareholder in JCI, holding 56,380,411 shares or 8.10% stake. With a 4.68% stake in JCI, the Dodge & Cox Stock Fund is the largest stakeholder. A total of 32,580,217 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.95% of JCI stock, is the second-largest Mutual Fund holder. It holds 20,512,360 shares valued at 982.13 million. Vanguard 500 Index Fund holds 2.21% of the stake in JCI, owning 15,396,621 shares worth 737.19 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2022, JCI reported revenue of $6.10B and operating income of $503.00M. It generated $11.00M net income for the quarter, which came to $1.24B over the last twelve months. The EBITDA in the recently reported quarter was $749.00M and diluted EPS was $0.02. EBITDA for the full year was $3.80B.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for JCI since 25 analysts follow the stock currently. There are 16 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 7 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With JCI analysts setting a high price target of $85.00 and a low target of $50.00, the average target price over the next 12 months is $62.67. Based on these targets, JCI could surge 58.11% to reach the target high and fall by -6.99% to reach the target low. Reaching the average price target will result in a growth of 16.57% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. JCI will report FY 2022 earnings on 11/10/2022. Analysts have provided yearly estimates in a range of $3.29 being high and $2.90 being low. For JCI, this leads to a yearly average estimate of $2.98. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Johnson Controls International plc surprised analysts by -$0.00 when it reported $0.63 EPS against a consensus estimate of $0.63. The surprise factor in the prior quarter was $0.01. Based on analyst estimates, the high estimate for the next quarter is $0.87 and the low estimate is $0.80. The average estimate for the next quarter is thus $0.85.

Summary of Insider Activity:

Insiders traded JCI stock several times over the past three months with 3 Buys and 0 Sells. In these transactions, 120,511 shares were bought while 0 shares were sold. The number of buy transactions has increased to 38 while that of sell transactions has risen to 54 over the past year. The total number of shares bought during that period was 1,261,755 while 941,992 shares were sold.

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