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1. Company Snapshot

1.a. Company Description

Johnson Controls International plc, together with its subsidiaries, engages in engineering, manufacturing, commissioning, and retrofitting building products and systems in the United States, Europe, the Asia Pacific, and internationally.It operates in four segments: Building Solutions North America, Building Solutions EMEA/LA, Building Solutions Asia Pacific, and Global Products.The company designs, sells, installs, and services heating, ventilating, air conditioning, controls, building management, refrigeration, integrated electronic security, integrated fire detection and suppression systems, and fire protection and security products for commercial, industrial, retail, small business, institutional, and governmental customers; and provides energy efficiency solutions and technical services, including inspection, scheduled maintenance, and repair and replacement of mechanical and control systems, as well as data-driven smart building solutions to non-residential building and industrial applications.


It also offers controls software and software services for residential and commercial applications.Johnson Controls International plc was founded in 1885 and is headquartered in Cork, Ireland.

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1.b. Last Insights on JCI

Johnson Controls International plc's recent performance was positively driven by its Q4 earnings beat, driven by solid HVAC and controls demand. The company lifted its FY26 outlook on strong margin and cash flow performance. Additionally, a quarterly dividend increase to $0.40 per share, payable on Oct. 17, 2025, reflects the company's strong cash flow. A $9B buyback program also supports shareholder value. The company's record backlog and steady free cash flow generation are notable strengths. (Source: Johnson Controls Q4 2025 Earnings Call Transcript)

1.c. Company Highlights

2. Johnson Controls' Q4 2025 Earnings: A Strong Finish to a Stellar Year

Johnson Controls delivered a robust Q4 2025 performance, capping off an impressive fiscal year. The company's sales growth came in at 6%, with segment margins expanding by 100 basis points, and adjusted EPS increasing 17% to $1.26, beating analyst estimates of $1.2. The strong EPS growth was driven by the company's ability to offset dilution from the residential and light commercial divestiture. Free cash flow conversion reached 102%, a notable achievement. Orders grew 7%, and the backlog expanded 13% to a record $15 billion, setting the stage for continued growth in the future.

Publication Date: Nov -06

📋 Highlights
  • Strong FY2025 Financial Performance:: Sales grew 6%, segment margins expanded 100 bps, and adjusted EPS increased 17% to $1.26, with free cash flow conversion at 102%.
  • Record Backlog Growth:: Orders rose 7%, backlog expanded 13% to $15 billion, driven by demand in data centers, pharmaceuticals, and large campuses.
  • 2026 Guidance Confirmed:: Mid-single-digit organic revenue growth, 30%+ operating leverage, double-digit adjusted EPS growth, and 100% free cash flow conversion expected.
  • Strategic Sustainability Innovation:: Launched coolant distribution unit and green heat project in Zurich, leveraging waste incineration for renewable energy.
  • Restructuring & Cost Efficiency:: Achieved $200M restructuring savings in FY2025, with $250M in benefits from delayering and SG&A leverage targeting 50%+ operating leverage in 2026.

Operational Highlights

The company's proprietary business system, rooted in winning and retaining customers through differentiated products, services, and exceptional experiences, continues to drive success. Johnson Controls is strengthening its leadership in advanced thermal management, with AI-driven demand for high-density data centers pushing cooling technology to new limits. The company successfully launched its coolant distribution unit offering and made a major announcement in Europe, providing green heat to the city of Zurich through a landmark waste incineration project.

Guidance and Outlook

For fiscal 2026, Johnson Controls expects to deliver mid-single-digit organic revenue growth, operating leverage of 30% or better, double-digit adjusted EPS growth, and approximately 100% free cash flow conversion. The company's guidance reflects continued operational discipline, strong customer demand, and a record backlog. Analysts estimate revenue growth at 5.4% for the next year, slightly below the company's guidance.

Valuation and Metrics

With a P/E Ratio of 44.3 and an EV/EBITDA of 31.06, the market appears to be pricing in significant growth expectations. The company's ROE (%) of 11.39 and ROIC (%) of 11.97 indicate a strong ability to generate returns on equity and invested capital. The Net Debt / EBITDA ratio of 3.15 is within the company's long-term target range, suggesting a manageable debt burden. The Dividend Yield (%) of 1.25 and Free Cash Flow Yield (%) of 3.0 provide a relatively attractive return for shareholders.

Strategic Investments and Portfolio Evaluation

Johnson Controls continues to invest in strategic initiatives, such as the Accelsius product, a 2-phase cold plate technology platform. The company is also evaluating its portfolio for potential divestitures, with about 10% of the portfolio being considered. This suggests a focus on optimizing the business mix and creating shareholder value.

3. NewsRoom

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Johnson Controls Announces Quarterly Dividend

Dec -04

Source: prnewswire.com

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Manatee County Selects Nopetro and Johnson Controls to Deliver Innovative Renewable Natural Gas Project

Dec -02

Source: prnewswire.com

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Inclement Weather Impacted Brick-and-Mortar Retail Traffic Throughout Black Friday Weekend

Dec -02

Source: businesswire.com

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U.S. Retail Traffic Was In-Line With Year-to-Date Trends on Black Friday, According to Sensormatic Solutions ShopperTrak Analytics

Nov -29

Source: businesswire.com

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Associated Banc Corp Acquires New Position in Johnson Controls International plc $JCI

Nov -27

Source: defenseworld.net

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Johnson Controls International Target of Unusually Large Options Trading (NYSE:JCI)

Nov -27

Source: defenseworld.net

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Johnson Controls: Upgrading To Buy On Execution And Backlog Strength

Nov -24

Source: seekingalpha.com

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Avantax Advisory Services Inc. Increases Holdings in Johnson Controls International plc $JCI

Nov -21

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.23%)

6. Segments

Building Solutions North America

Expected Growth: 4.5%

Growing demand for energy-efficient HVAC systems, increasing adoption of smart buildings, and rising need for fire and security systems drive growth in North America.

Global Products

Expected Growth: 4.5%

Increasing demand for energy-efficient HVAC systems, growing need for building automation and control systems, and rising adoption of smart buildings drive growth in Johnson Controls’ Global Products segment.

Building Solutions EMEA / LA

Expected Growth: 6.5%

Increasing adoption of energy-efficient solutions, stringent regulations, and growing demand for building management systems drive growth in Europe, Middle East, and Africa, supported by Johnson Controls International plc’s strong market presence.

Building Solutions Asia Pacific

Expected Growth: 8.1%

Growing demand for energy-efficient solutions, increasing adoption of building automation systems, and government initiatives promoting sustainable infrastructure development in the Asia Pacific region drive the segment's growth for Johnson Controls' HVAC, building automation, and energy efficiency solutions.

7. Detailed Products

HVAC Equipment

Johnson Controls offers a wide range of heating, ventilation, and air conditioning (HVAC) equipment, including air handlers, chillers, condensing units, and rooftop units.

Building Automation Systems

Johnson Controls' building automation systems integrate various building systems, such as HVAC, lighting, and security, to optimize energy efficiency and building performance.

Fire Detection and Suppression Systems

Johnson Controls offers a range of fire detection and suppression systems, including smoke detectors, fire alarms, and sprinkler systems.

Security Systems

Johnson Controls' security systems include access control, video surveillance, and intrusion detection systems.

Energy Storage Systems

Johnson Controls offers energy storage systems, including batteries and inverters, to optimize energy efficiency and reduce energy costs.

Industrial Refrigeration Systems

Johnson Controls' industrial refrigeration systems are used in cold storage facilities, supermarkets, and industrial processes.

Retail Solutions

Johnson Controls offers a range of retail solutions, including refrigeration systems, HVAC systems, and energy management systems.

8. Johnson Controls International plc's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Johnson Controls International plc is moderate due to the availability of alternative products and services in the market.

Bargaining Power Of Customers

The bargaining power of customers for Johnson Controls International plc is low due to the company's strong brand reputation and diversified product offerings.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Johnson Controls International plc is moderate due to the company's dependence on a few key suppliers for certain components.

Threat Of New Entrants

The threat of new entrants for Johnson Controls International plc is low due to the high barriers to entry in the industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for Johnson Controls International plc is high due to the competitive nature of the industry, with several established players vying for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 34.84%
Debt Cost 3.95%
Equity Weight 65.16%
Equity Cost 10.18%
WACC 8.00%
Leverage 53.48%

11. Quality Control: Johnson Controls International plc passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Saint-Gobain

A-Score: 5.2/10

Value: 4.8

Growth: 5.8

Quality: 4.3

Yield: 4.4

Momentum: 6.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Johnson Controls

A-Score: 5.2/10

Value: 1.6

Growth: 4.9

Quality: 5.6

Yield: 3.8

Momentum: 8.5

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
ASSA ABLOY

A-Score: 5.2/10

Value: 2.4

Growth: 6.8

Quality: 6.1

Yield: 3.1

Momentum: 4.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Trane Technologies

A-Score: 5.1/10

Value: 1.1

Growth: 7.3

Quality: 7.4

Yield: 2.5

Momentum: 5.5

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Geberit

A-Score: 4.9/10

Value: 0.9

Growth: 3.7

Quality: 7.2

Yield: 1.9

Momentum: 6.5

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Ferguson

A-Score: 3.9/10

Value: 2.2

Growth: 6.3

Quality: 5.9

Yield: 3.8

Momentum: 0.0

Volatility: 5.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

114.23$

Current Price

114.23$

Potential

-0.00%

Expected Cash-Flows