Barclays sees limited upside for Johnson Controls stock

Barclays said in a note that the upside for Johnson Controls International PLC’s stock might not be “substantial” from this point onward, after it became clear activist investor Elliott Investment Management held an over $1 billion stake.

“While there has been relatively little activism in the MI sector in recent years, this news should not be a big surprise,” Barclays analyst Julian Mitchell wrote in a client note.

“It is not uncommon for activist investors to jump on a train that is already in the process of leaving the station, and JCI has already embarked on many of the usual activist shareholder prescriptions, including levering up the balance sheet to do share buybacks (it was 2.4X levered at end March), and announcing the divestment of non-core assets.”

Mitchell has assigned an “Equal Weight” investment rating and a 12-month price target of $59 on the stock.

Stock Performance

The shares of Johnson Controls International PLC (JCI) closed 2.32% ($1.60) higher at $70.62 in New York on Monday, as they extended the gains from the previous five market sessions.

It has been the highest closing price for the stock since February 2nd 2022.

The company’s total market cap now stands at $47.575 billion.

The shares of Johnson Controls International PLC (JCI) went down 9.94% in 2023, compared with a 24.23% gain for the benchmark index, S&P 500 (SPX).

The company’s shares have risen 22.52% so far this year.

Analyst stock price forecast and recommendation

According to TipRanks, at least 7 out of 14 surveyed investment analysts had rated Johnson Controls International’s stock as “Hold”, while 6 – as “Buy”. The median price target on the stock stands at $66.77, which translates into a 5.45% downside compared to the closing price on Monday.

The high point of the analyst forecast range stands at $79.00.