Johnson Controls (JCI) Prices $700M Worth of Notes Offering
Summary
Johnson Controls International plc JCI announced the pricing of senior notes yesterday. The offerings rating is expected to be Baa2 (Stable) by Moodys and BBB+ (Stable) by S&P.Johnson Controls will use net proceeds from the notes offering for meeting general corporate purposes that include repayment, redemption and refinancing of outstanding commercial paper and other near-term obligations.We believe that the offering of senior notes will increase the companys debts and, in turn, might inflate its financial obligations and hurt profitability. Exiting first-quarter fiscal 2024 (ended Dec 31, 2023), its long-term debts were $7,959 million, reflecting a 1.8% increase on a year-over-year basis.With a market capitalization of $43.8 billion, Johnson Controls currently carries a Zacks Rank #4 (Sell). JCIs Install business under the Building Solutions Asia Pacific unit has also been subject to a challenging market condition in China. Escalating operating costs and expenses might dent its bottom line.In the past year, the companys shares have risen 10.4% compared with the industrys growth of 13.8%.The Zacks Consensus Estimate for earnings is pegged at $3.61 for fiscal 2024 (ending Sep 30, 2024) and at $4.12 for fiscal 2025 (ending Sep 30, 2025), implying a decline of 0.6% and 0.7%, respectively, from that recorded 60 days ago.Some better-ranked stocks from the same space have been discussed below.IDEX Corporation IEX carries a Zacks Rank #2 (Buy) at present.