November 21, 2024
Top 10 Stock Johnson Controls Sell Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Johnson Controls – Top 10 Stock in Water Technology
Johnson Controls is listed as a top 10 stock on November 21, 2024 in the market index Water Tech because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 4 (4% performer), Obermatt issues an overall sell recommendation for Johnson Controls on November 21, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Building Products |
| Index | Dividends USA, Energy Efficient, Human Rights, Water Tech, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Johnson Controls Sell
| 360 METRICS | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 65 |
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| GROWTH | ||||||||
| GROWTH | 21 |
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| SAFETY | ||||||||
| SAFETY | 19 |
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| SENTIMENT | ||||||||
| SENTIMENT | 19 |
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| 360° VIEW | ||||||||
| 360° VIEW | 4 |
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ANALYSIS: With an Obermatt 360° View of 4 (better than 4% compared with alternatives), overall professional sentiment and financial characteristics for the stock Johnson Controls are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Johnson Controls. Only the consolidated Value Rank has an attractive rank of 65, which means that the share price of Johnson Controls is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 65% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 21, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 19, meaning the company has a riskier financing structure than 81% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 81% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 19. ...read more
RECOMMENDATION: With a consolidated 360° View of 4, Johnson Controls is worse than 96% of all alternative stock investment opportunities based on the Obermatt Method. This means that Johnson Controls shares are on the riskier side for investors. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 65. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 21), a riskier financing structure than the competition (Safety Rank of 19), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 19) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of Johnson Controls is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Johnson Controls. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Johnson Controls negative
ANALYSIS: With an Obermatt Sentiment Rank of 19 (better than 19% compared with alternatives), overall professional sentiment and engagement for the stock Johnson Controls is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Johnson Controls. Analyst Opinions are at a rank of 37 (worse than 63% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 34 which means that stock research experts are getting even more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 22, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 78% of competitors). No wonder, the Professional Investors rank is only 47, which means that professional investors hold less stock in this company than in 53% of alternative investment opportunities. Pros tend to stay away from Johnson Controls, which may be due to a small company size but just as likely because of its relatively low Sentiment Rank. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 19 (less encouraging than 81% compared with investment alternatives), Johnson Controls has a reputation among professional investors that is far below that of its competitors. Investors should be careful with this stock right now. Further research is required if an investment is desired, because the facts found in the professional community are all negative. ...read more
Value Strategy: Johnson Controls Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 65 (better than 65% compared with alternatives), Johnson Controls shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Johnson Controls. Expected dividend yields are higher than for 93% of comparable companies (a Dividend Yield rank of 93), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 52, which means that the stock price is lower compared with invested capital than for 52% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 38 which means that the stock price compared with what market professionals expect for future profits is higher than for 62% of comparable companies, indicating a low value concerning Johnson Controls's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Johnson Controls with a rank of 46. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 54% of comparable companies, indicating a low value concerning Johnson Controls's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 65, is a buy recommendation based on Johnson Controls's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Johnson Controls may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. ...read more
Growth Strategy: Johnson Controls Growth Momentum negative
| GROWTH METRICS | November 21, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 29 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 19 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 44 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 83 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 21 |
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ANALYSIS: With an Obermatt Growth Rank of 21 (better than 21% compared with alternatives), Johnson Controls shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Johnson Controls. Sales Growth has a below market rank of 29, which means that, currently, professionals expect the company to grow less than 71% of its competitors. The same is valid for Capital Growth, with a rank of 44, and Profit Growth, with a rank of 19. Currently, professionals expect the company to grow its profits less than 81% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 83, which means that the stock returns have recently been above 83% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 21, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Johnson Controls, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Johnson Controls Debt Financing Safety risky
| SAFETY METRICS | November 21, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 36 |
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| REFINANCING | ||||||||
| REFINANCING | 13 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 53 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 19 |
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ANALYSIS: With an Obermatt Safety Rank of 19 (better than 19% compared with alternatives), the company Johnson Controls has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Johnson Controls is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Johnson Controls. Liquidity is at 53, meaning the company generates more profit to service its debt than 53% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 13, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 87% of its competitors. Leverage is also high at a rank of 36, which means that the company has an above-average debt-to-equity ratio. It has more debt than 64% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 19 (worse than 81% compared with alternatives), Johnson Controls has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Johnson Controls Lowest Financial Performance
| COMBINED PERFORMANCE | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 65 |
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| GROWTH | ||||||||
| GROWTH | 21 |
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| SAFETY | ||||||||
| SAFETY | 53 |
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| COMBINED | ||||||||
| COMBINED | 8 |
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ANALYSIS: With an Obermatt Combined Rank of 8 (worse than 92% compared with investment alternatives), Johnson Controls (Building Products, USA) shares have lower financial characteristics compared with similar stocks. Shares of Johnson Controls are a good value (attractively priced) with a consolidated Value Rank of 65 (better than 65% of alternatives) but show below-average growth (Growth Rank of 21), and are riskily financed (Safety Rank of 19), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 8, is a sell recommendation based on Johnson Controls's financial characteristics. As the company Johnson Controls's key financial metrics exhibit good value (Obermatt Value Rank of 65) but low growth (Obermatt Growth Rank of 21) and risky financing practices (Obermatt Safety Rank of 19), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 65% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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