Johnson Controls International (JCI) fiscal Q2 results that topped expectations and raised its fiscal 2026 outlook, with strong data center demand and improving operational execution continuing to support the company's "multi-year turnaround story," RBC Capital Markets said.
The company posted an operating earnings beat of $0.10, or 8%, above estimates and raised its fiscal 2026 EPS guidance roughly 2% above consensus. Organic sales grew 6% while total company orders climbed 30%, driven by strong growth in the Americas and Asia-Pacific, the note said Wednesday.
Data center demand was a key growth driver, contributing to a record $20 billion backlog, up 26% organically. RBC highlighted management's focus on high-performance chiller systems designed for mission-critical environments such as data centers, semiconductor manufacturing and biologics, noting the products also reduce energy consumption.
Investor concerns over slowing order growth and flat services orders appear overdone, RBC said, adding that the company has "ample capacity" to meet demand over the next 12 to 18 months.
RBC has a sector perform rating on Johnson Controls International and raised its price target to $154 from $139.
Price: $138.20, Change: $-4.94, Percent Change: -3.45%