Johnson Controls Intl (JCI:NYS) Fundamental Valuation Report

Fundamental Valuation Report

Johnson Controls Intl(JCI:NYS)

Industrials:Engineering & Construction

This Report was generated using the valuation tools available on For a free 30 day trial click here.

Close Price/Date
$33.25 (USD) 21/11/2018

Weighted Valuation
$37.75 (USD)

Overall Rating
Undervalued by 13.5%

Valuation Models Analyst Consensus: $37.75 (USD)
(in order of importance)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation

Company Overview (JCI:NYS USD)

Price 33.25
Range 33.07 – 33.73
52 week 31.28 – 41.43
Open 33.32
Vol / Avg. 3.17M/6.14M
Mkt cap 30.72B
P/E 14.33
Div/yield 1.04/0.03
EPS 2.32
Shares 924.06M
Beta 1.37

Company Description

Johnson Controls operates two distinct businesses. The building technologies and solutions segment manufactures, installs, and services HVAC systems, building management systems and controls, industrial refrigeration systems, and fire and security solutions. The power solutions segment manufactures vehicle batteries that are sold to automakers and aftermarket retailers. On Nov. 13, Johnson Controls announced it had reached an agreement to sell its power solutions business for $13.2 billion. The sale is expected to close by June 2019.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for JCI:NYS

Using a discounted cash flow model we generated an intrinsic value of $43.27 (USD) for JCI:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

JCI:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $43.27 1% 5% 1% 5%
WACC (or Ke) 8.47 $54.66 $35.39
Terminal Growth Rate 3.00 $36.17 $53.55
Tax Rate 0.18 $46.57 $39.96
Cash Flow 3,546,702,000 $40.58 $45.96
Capital Expenditures 45,800,000 $43.30 $43.24
Long Term Debt 7,998,000,000 $43.70 $42.84

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $55.03 (USD) for JCI:NYS. We also generated a valuation of $24.79 (USD) using other metrics and comparables.
The comparable companies were Jacobs Engineering Group (JEC:NYS) and SNC-Lavalin Group (SNC:TSE).

Company JCI:NYS End Date Value
Earnings/Share $2.32 (USD)
Book Value/Share $22.48 (USD)
Sales/Share $33.38 (USD)
Cash Flow/Share $2.76 (USD)
EBITDA/Share $4.75 (USD)
Price Based on Comps Adjustment Factor (%)
$69.86 (USD) 10.3
$38.59 (USD) -1.0
$25.44 (USD) 0.2
$47.59 (USD) 0.0
$69.16 (USD) 30.8
JCI:NYS Ratios Used Average Values JEC:NYS SNC:TSE
13.16 PE Ratio 30.11 33.52 26.70
1.42 PB Ratio 1.72 1.79 1.64
0.96 PS Ratio 0.76 0.74 0.79
11.59 PCF Ratio 21.52 21.52 0.00
8.89 EV to EBITDA 14.57 17.20 11.93


Using a multiples approach we generated a valuation of  $44.20 (USD) for JCI:NYS

Company JCI:NYS End Date Value
Earnings/Share $2.32 (USD)
Book Value/Share $22.48 (USD)
Sales/Share $33.38 (USD)
Cash Flow/Share $2.76 (USD)
EBITDA/Share $4.75 (USD)
Price Based on Comps Adjustment Factor
$47.50 (USD) 0
$52.43 (USD) 0
$25.77 (USD) 0
$42.44 (USD) 0
$52.88 (USD) 0
Ratios Ratio Average
PE Ratio 20.47
PB Ratio 2.33
PS Ratio 0.77
PCF Ratio 15.38
EV to EBITDA 11.14

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  JCI:NYS for the last 10 years was  2.26

We ran the Adjusted Book Value for  JCI:NYS and generated a book value of  $22.88 (USD)
By multiplying these we get an adjusted valuation of  $51.68 (USD)

Analyst Data

In the Stockcalc database there are 4 analysts that provide a valuation for JCI:NYS. The 4 analysts have a concensus valuation for JCI:NYS for 2019 of $37.75 (USD).

JCI:NYS Johnson Controls Intl

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
2 1 1 3.6000 Outperform 2018-11-20

Current Price: 33.25 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 2.41 2.73 2.36
# EPS Analysts 6 5 1
Mean Revenue 27,894.20 27,542.40 24,673.30
# Revenue Analysts 5 4 1
Mean Target Price 37.75
Mean Cash Flow 3.71 3.98 3.53
Mean EBITDA 3,837.30 4,118.90 3,443.40
Mean Net Income 2,219.10 2,338.80 1,734.50
Mean Debt Outstanding 10,022.00 9,267.40
Mean Tax Rate 16.40 16.80
Mean Growth Rate 6.37
Mean Capital Expenditure 1,132.50 1,100.50 1,350.00

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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