Johnson Controls International PLC (JCI) is poised for growth, according to BofA Securities, as the company prepares to report its fiscal fourth-quarter results on December 10th. The investment firm has upgraded its rating for JCI from Neutral to Buy, raising the price target from $76 to $80. This bullish outlook is fueled by several key factors.
JCI is making significant strides in the data center market, a highly profitable segment of the business. The company is on track to generate approximately $4 billion from data centers, accounting for about 14% of its projected revenue for fiscal 2024. This revenue stream is expected to further increase as JCI divests its Air Distribution Technologies and Residential & Light Commercial HVAC businesses, streamlining its focus.
Another significant catalyst for JCI’s stock is the imminent appointment of a new CEO. The company is expected to announce this appointment before the end of the year, and BofA Securities believes this will be a positive catalyst for the stock. The analyst sees this move as a potential sign of a new strategic direction for JCI, especially with the involvement of activist investors.
Currently, JCI’s stock is trading at a discount compared to its US HVAC peers, which the analyst believes presents an attractive opportunity for investors.
JCI shares rose 1.9% to $69.89 at the time of publication on Tuesday, reflecting investor confidence in the company’s future prospects.
