Option Trade 
Johnson Controls Inc (NYSE:JCI) Calls 
Wednesday, April 22, 2015

** OPTION TRADE: Buy the JCI Jul 2015 55.000 call (JCI150717C00055000) at or under $1.00, good for the day. Place a protective stop limit at $0.40 and a pre-determined sell at $2.00.

by Ian Harvey

April 22, 2015


Johnson Controls Inc (NYSE: JCI), a diversified technology company, will be releasing its Q215 earnings data on Thursday, April 23rd. Analysts expect Johnson Controls to post earnings of $0.75 per share and revenue of $10.21 billion for the quarter. In the last quarter, the company had posted a positive earnings surprise of 2.60%.

Johnson Controls Inc, the auto parts supplier and maker of climate control systems for buildings, is expected to report higher second-quarter profit on Thursday, driven by higher sales in its seating and interiors business as auto sales and production rose in the first quarter.

The company's buildings efficiency business, which provides air conditioning equipment and building management services, is also expected to report higher revenue as U.S. office vacancy rate declined to its lowest level since the third quarter to 2009.

Johnson Controls has received a consensus rating of “Buy” from the fifteen analysts that are presently covering the company.

Technical Outlook

Johnson Controls traded up 0.06% on Tuesday, hitting $51.14. The stock had a trading volume of 1,899,708 shares.

Johnson Controls has a 1-year low of $38.60 and a 1-year high of $52.00. The stock has a 50-day moving average of $50.00 and a 200-day moving average of $47.00.

The company has a market cap of $33.61 billion and a P/E ratio of 27.42.


Johnson Controls last released its earnings data on Thursday, January 22nd. The company reported $0.76 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.77 by $0.01. The company had revenue of $10.67 billion for the quarter, compared to the consensus estimate of $10.70 billion.

On average, analysts expect Johnson Controls to post $3.56 EPS for the current fiscal year and $4.05 EPS for the next fiscal year.

Factors Influencing this Quarter

Johnson Controls projects better earnings in fiscal 2015 compared with fiscal 2014, based on expectations of higher profitability from all three businesses. The company anticipates earnings per share in the range of 74–76 cents in the second quarter of fiscal 2015, higher than 64 cents reported in second-quarter fiscal 2014.

Revenues should benefit from higher automotive production in all of the company’s locations, compared with the fiscal 2014 level, with a 10% improvement expected in China, 2% in North America and 2% in Europe.

Analysts Opinions

Equities researchers at JPMorgan Chase & Co. hoisted their target price on shares of Johnson Controls from $52.00 to $55.00 in a research report issued on Wednesday, April 1st. The firm currently has a “neutral” rating on the stock. JPMorgan Chase & Co.’s target price would suggest a potential upside of 9.65% from the stock’s previous close.

• Analysts at Zacks reiterated a “hold” rating and set a $50.00 price target on shares of Johnson Controls in a research note on Thursday, March 26th.

• Analysts at Deutsche Bank reiterated a “hold” rating and set a $55.00 price target (down previously from $56.00) on shares of Johnson Controls in a research note on Wednesday, March 11th.

• Finally, analysts at RBC Capital raised their price target on shares of Johnson Controls from $50.00 to $55.00 and gave the company an “outperform” rating in a research note on Friday, January 23rd.

Seven analysts have rated the stock with a hold rating, six have issued a buy rating and one has issued a strong buy rating to the company’s stock. The stock presently has an average rating of “Buy” and a consensus target price of $55.83.

Therefore, based on the facts above the following option trade of the week is recommended…..

**OPTION TRADE: Buy the JCI Jul 2015 55.000 call (JCI150717C00055000) at or under $1.00, good for the day. Place a protective stop limit at $0.40 and a pre-determined sell at $2.00.

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