CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:
We raise our 12-month target to $160 from $153. This is based on an average of a forward P/E of 27.1x our FY 27 EPS view of $5.60 ($152), above the five-year average of 18x on promising sales growth due to favorable demand trends and robust EBIT expansion, and our DCF model, using a terminal growth rate of 2.5%, WACC of 7.9%, and 10-year FCFF CAGR of 12.0% ($168). We increase our adjusted EPS estimates to $4.85 from $4.64 for FY 26 and to $5.60 from $5.51 for FY 27. JCI shares were down slightly following the release, and we think guidance for in-line FQ3 earnings wasn't positive enough considering the company's streak of nine consecutive earnings beats. However, we note JCI's history of conservative guidance and see significant upside longer term from data center spend and customer investments in cooling infrastructure. In our view, this remains a key growth driver. Therefore, we would use any weakness as a buying opportunity. In our opinion, JCI's risk/reward potential remains compelling at current levels.