Glendale-based Johnson Controls Inc. is uniquely positioned for growth byÂ capitalizing on the remarkable recovery of the U.S. automotive industry.Â The companyâ€™s stock has been trading at or near its 52-week high recently.
Johnson Controlsâ€™ Automotive Experience unit accounts for 49 percent of theÂ companyâ€™s revenues. So, with each of the "Big Three" American automobileÂ makers reporting strong June sales, the outlook is bright for key suppliers such asÂ Johnson Controls.
Some encouraging statistics:
- General Motors Co.â€™s June sales rose 6.5 percent to 264,843 vehicles.
- Ford Motor Co.â€™s June sales rose 13 percent to 228,174 vehicles.
- Chrysler Group LLCâ€™s June sales rose 8.2 percent to 156,686 vehicles.
In April, Robert W. Baird & Co. Inc. analysts David Leiker and Joseph VeruwinkÂ took note of the positive tailwinds building behind behind Johnson Controls andÂ reiterated their "outperform" rating on the companyâ€™s stock, which trades with theÂ ticker symbol of "JCI."
"We upgraded Johnson Controls to â€˜outperform.â€™ Higher earnings expected overÂ the next several years with improving margins, growing automotive end marketsÂ and increasing demand for advanced batteries and building efficiency," the BairdÂ analysts wrote in their research note.
Johnson Controlsâ€™ automotive battery segment, which employs around 13,000Â people, is the largest global supplier of lead-acid batteries with a 36-percentÂ market share.
"North American (automotive) production will rebound with growth of 4.4 percentÂ and 6.8 percent respectively in the upcoming third and fourth fiscal quarters. ThenÂ finally, China production will be up 9 percent in the next six-month periodÂ consistent with the comment I made earlier about the prospects for the full fiscalÂ year," Johnson Controls chief executive officer Stephen Roells said in a second-quarter conference call with analysts.
The company received another boost when it won a contract to provide automotiveÂ batteries t…Read more...