Johnson Controls, Inc. : Bet on bearish channel
Johnson Controls’ markets are automotive systems and building controls. The company supplies seating systems, interior systems, and batteries. Johnson Controls also provides building control systems and services, energy management, and integrated facility management, as well as provides batteries for automobiles and hybrid electric vehicles.
From a fundamental viewpoint, the company seems weak valued. Basing at the current price, the enterprise's capitalization, reprocessed its financial position net of debt, representing approximately 0.54 times its turnover. In add, the share is trading 10 times FY 2012 earnings, according to Thomson Reuters’ consensus.
The share is trading in bearish trend on the short and mid-term. This trend is evidenced by a bearish channel in daily chart. The share is situated on the lower band of this channel, and we forecast a technical rebound towards trend resistance of USD 29. The breakout of this level could open new bullish scenario. The stop loss will be placed at USD 26.2 in order to cover the continuation of bearish trend.
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Valuation |
2013e |
2014e |
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PER (Price / EPS)
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15,1x |
12,2x |
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Capitalization / Revenue
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0,60x |
0,57x |
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EV / Revenue
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0,72x |
0,66x |
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EV / EBITDA
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9,27x |
7,82x |
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Yield (DPS / Price)
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1,97% |
2,14% |
| Profitability |
2013e |
2014e |
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Operating Margin (EBIT / Sales)
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5,52% |
6,29% |
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operating laverage (Delta EBIT / Delta Sales)
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2,78x |
3,61x |
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Net Margin (Net Profit / Revenue)
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3,99% |
4,68% |
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ROA (Net Profit / Asset)
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6,71% |
7,41% |
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ROE (Net Profit / Equities)
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14,6% |
15,8% |
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Rate of Dividend
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29,8% |
26,0% |
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