On Monday, UBS adjusted its stance on Johnson Controls (NYSE:JCI) International plc (NYSE:JCI) stock, moving its rating from Buy to Neutral. The firm also revised its price target, lowering it to $68 from the previous $74. The revision comes amid observations of stabilizing and improving market share trends that were noted in March and April.
The firm's analysts have identified a projected increase in free cash flow estimate (FCFE) for the year 2025 compared to 2024, which they believe contributes to the upside of their price target. Despite the downgrade, the analysts acknowledge that the risk/reward profile for Johnson Controls appears attractive when compared to its industry peers.
The change in Johnson Controls' outlook is influenced by the overall growth in gross gaming revenue (GGR) in Macau, which continues to show positive momentum. This factor is among the considerations that led to the adjustment in the company's stock valuation by UBS.
The new price target of $68 reflects a decrease from the prior target but still suggests a potential for financial growth based on the company's future cash flow projections. This adjustment provides investors with the latest valuation perspective based on the current market dynamics and company performance.
Johnson Controls has not yet issued a public statement in response to the rating change and the new price target set by UBS. Shareholders and potential investors are advised to consider the latest information from UBS as they manage their investment decisions regarding Johnson Controls.
InvestingPro Insights
As investors digest UBS's revised stance on Johnson Controls International plc, real-time data and insights from InvestingPro can provide a more comprehensive view of the company's financial health and market position. With a market capitalization of $42.02 billion and a P/E ratio that has adjusted to a more attractive 19.61 in the last twelve months as of Q2 2024, Johnson Controls appears to be valued reasonably in the Building Products industry.
InvestingPro Tips highlight that Johnson Controls has a notable track record of maintaining and raising dividends, with payments sustained for 54 consecutive years and an increase for the last 3 years. This consistency might appeal to income-focused investors, especially considering the current dividend yield of 2.37%. Moreover, the company's stock has experienced a strong return over the last three months, with a 17.8% total price return, indicating a positive short-term performance trend.
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