Glendale-based Johnson Controls Inc. is uniquely positioned for growth by capitalizing on the remarkable recovery of the U.S. automotive industry. The company’s stock has been trading at or near its 52-week high recently.
Johnson Controls’ Automotive Experience unit accounts for 49 percent of the company’s revenues. So, with each of the "Big Three" American automobile makers reporting strong June sales, the outlook is bright for key suppliers such as Johnson Controls.
Some encouraging statistics:
- General Motors Co.’s June sales rose 6.5 percent to 264,843 vehicles.
- Ford Motor Co.’s June sales rose 13 percent to 228,174 vehicles.
- Chrysler Group LLC’s June sales rose 8.2 percent to 156,686 vehicles.
In April, Robert W. Baird & Co. Inc. analysts David Leiker and Joseph Veruwink took note of the positive tailwinds building behind behind Johnson Controls and reiterated their "outperform" rating on the company’s stock, which trades with the ticker symbol of "JCI."
"We upgraded Johnson Controls to ‘outperform.’ Higher earnings expected over the next several years with improving margins, growing automotive end markets and increasing demand for advanced batteries and building efficiency," the Baird analysts wrote in their research note.
Johnson Controls’ automotive battery segment, which employs around 13,000 people, is the largest global supplier of lead-acid batteries with a 36-percent market share.
"North American (automotive) production will rebound with growth of 4.4 percent and 6.8 percent respectively in the upcoming third and fourth fiscal quarters. Then finally, China production will be up 9 percent in the next six-month period consistent with the comment I made earlier about the prospects for the full fiscal 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 automotive batteries t…Read more...