Now Is Not The Time To Buy Johnson Controls Stock
While the stock price of Johnson Controls International (NYSE:JCI) has risen by 6% this year, outperforming the S&P 500 index which is down 2%, our analysis indicates that JCI remains an unattractive pick at its current price of approximately $84. We have identified several concerns regarding JCI stock that make it an unappealing investment. We arrive at our conclusion by comparing the current valuation of JCI stock with its operating performance over the recent years as well as its current and historical financial condition. Our analysis of Johnson Controls International along key parameters of Growth, Profitability, Financial Stability, and Downturn Resilience shows that the company has a moderate operating performance and financial condition, as detailed below. That said, if you seek upside with lower volatility than individual stocks, the Trefis High-Quality portfolio presents an alternative — having outperformed the S&P 500 and generated returns exceeding 91% since its inception.
How Does Johnson Controls’ Valuation Look vs. The S&P 500?
Going by what you pay per dollar of sales or profit, JCI stock is currently valued in line with the broader market.
• Johnson Controls International has a price-to-sales (P/S) ratio of 2.5 vs. a figure of 3.2 for the S&P 500
• Additionally, the company’s price-to-operating income (P/EBIT) ratio is 22.9 compared to 24.3 for S&P 500
• And, it has a price-to-earnings (P/E) ratio of 21.8 vs. the benchmark’s 24.3
How Have Johnson Controls’ Revenues Grown Over Recent Years?
Johnson Controls International’s Revenues have declined marginally over recent years.
• Johnson Controls International has seen its top line decline at an average rate of 0.6% over the last 3 years (vs. increase of 6.3% for S&P 500)
• Its revenues have grown 2.8% from $22 Bil in fiscal 2023 to $23 Bil in fiscal 2024 (vs. growth of 5.2% for S&P 500)
• Also, its quarterly revenues grew 4.2% to $5.4 Bil in the most recent quarter from $5.2 Bil a year ago (vs. 5.0% improvement for S&P 500)
How Profitable Is Johnson Controls?
Johnson Controls’ profit margins are around the median level for companies in the Trefis coverage universe.
• Johnson Controls International’s Operating Income over the last four quarters was $2.5 Bil, which represents a moderate Operating Margin of 11.1% (vs. 13.0% for S&P 500)
• Johnson Controls International’s Operating Cash Flow (OCF) over this period was $2.6 Bil, pointing to a moderate OCF-to-Sales Ratio of 11.6% (vs. 15.7% for S&P 500)
Does Johnson Controls Look Financially Stable?
Johnson Controls International’s balance sheet looks fine.
• Johnson Controls International’s Debt figure was $10.0 Bil at the end of the most recent quarter, while its market capitalization is $56 Bil (as of 3/25/2025). This implies a strong Debt-to-Equity Ratio of 17.7% (vs. 19.0% for S&P 500). [Note: A lower Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $1.2 Bil of the $42 Bil in Total Assets for Johnson Controls International. This yields a poor Cash-to-Assets Ratio of 2.9% (vs. 14.8% for S&P 500)
How Resilient Is JCI Stock During A Downturn?
JCI stock has fared worse than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.
Inflation Shock (2022)
• JCI stock fell 42.4% from a high of $80.38 on 6 January 2022 to $46.30 on 14 July 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 6 November 2024
• Since then, the stock has increased to a high of $90.60 on 18 February 2025 and currently trades at around $84
Covid Pandemic (2020)
• JCI stock fell 44.6% from a high of $42.45 on 23 February 2020 to $23.50 on 23 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 14 September 2020
Global Financial Crisis (2008)
• JCI stock fell 67.0% from a high of $44.31 on 20 April 2008 to $14.63 on 20 November 2008, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 11 April 2011
Putting All The Pieces Together: What It Means For JCI Stock
In summary, Johnson Controls International’s performance across the parameters detailed above are as follows:
• Growth: Neutral
• Profitability: Neutral
• Financial Stability: Neutral
• Downturn Resilience: Very Weak
• Overall: Neutral
While JCI stock exhibits a moderate performance based on the parameters we’ve considered, we find a disconnect with its current valuation, which mirrors that of the broader market. This misalignment leads us to conclude that it is an unattractive stock at current levels.
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