Yahoo Finance Earnings Beat: Johnson Controls International plc Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
Last week saw the newest quarterly earnings release from Johnson Controls International plc (NYSE:JCI), an important milestone in the company's journey to build a stronger business. It looks like a credible result overall - although revenues of US$7.2b were what the analysts expected, Johnson Controls International surprised by delivering a (statutory) profit of US$1.45 per share, an impressive 35% above what was forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Johnson Controls International after the latest results.
View our latest analysis for Johnson Controls International
Following last week's earnings report, Johnson Controls International's 19 analysts are forecasting 2025 revenues to be US$27.5b, approximately in line with the last 12 months. Statutory earnings per share are predicted to shoot up 66% to US$4.03. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$28.8b and earnings per share (EPS) of US$4.07 in 2025. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
The analysts have also increased their price target 5.7% to US$75.50, clearly signalling that lower revenue forecasts next year are not expected to have a material impact on Johnson Controls International's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Johnson Controls International, with the most bullish analyst valuing it at US$93.00 and the most bearish at US$60.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Johnson Controls International's revenue growth is expected to slow, with the forecast 1.6% annualised growth rate until the end of 2025 being well below the historical 3.6% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.2% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Johnson Controls International.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings are more important to the intrinsic value of the business. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Johnson Controls International going out to 2026, and you can see them free on our platform here.
Even so, be aware that Johnson Controls International is showing 3 warning signs in our investment analysis , and 1 of those is a bit concerning...
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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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