Market Overview

P/E Ratio Insights for Johnson Controls Intl

Share:

 

Right now, Johnson Controls Intl Inc. (NYSE: JCI) share price is at $43.61, after a 0.73% drop. Over the past month, the stock went up by 4.71%, but over the past year, it actually decreased by 1.40%. With questionable short-term performance like this, and great long-term performance, long-term shareholders might want to start looking into the company's price-to-earnings ratio. 

The stock is currently higher from its 52 week low by 91.48%. Assuming that all other factors are held constant, this could present itself as an opportunity for investors trying to diversify their portfolio with Building Products stocks, and capitalize on the lower share price observed over the year. 

 

The P/E ratio is used by long-term shareholders to assess the company’s market performance against aggregate market data, historical earnings, and the industry at large. A lower P/E indicates that shareholders do not expect the stock to perform better in the future, and that the company is probably undervalued. It shows that shareholders are less than willing to pay a high share price, because they do not expect the company to exhibit growth, in terms of future earnings. 

Most often, an industry will prevail in a particular phase of a business cycle, than other industries. 

Johnson Controls Intl Inc. has a better P/E ratio of 45.3 than the aggregate P/E ratio of 28.62 of the Building Products industry. Ideally, one might believe that Johnson Controls Intl Inc. might perform better in the future than it’s industry group, but it’s probable that the stock is overvalued. 

 

There are many limitations to P/E ratio. It is sometimes difficult to determine the nature of the earnings makeup of a company. Shareholders might not get what they're looking for, from trailing earnings.

 

Related Articles (JCI)

View Comments and Join the Discussion!

Posted-In: P/E Ratio InsightsEarnings News Intraday Update Markets