NEW YORK ( TheStreet) -- Johnson Controls (NYSE: JCI) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share and increase in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.
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- JCI's revenue growth has slightly outpaced the industry average of 3.3%. Since the same quarter one year prior, revenues slightly increased by 2.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- JOHNSON CONTROLS INC has improved earnings per share by 17.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, JOHNSON CONTROLS INC increased its bottom line by earning $2.36 versus $2.19 in the prior year. This year, the market expects an improvement in earnings ($2.52 versus $2.36).
- The current debt-to-equity ratio, 0.57, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.72 is somewhat weak and could be cause for future problems.
- The gross profit margin for JOHNSON CONTROLS INC is rather low; currently it is at 16.50%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.90% trails that of the industry average.
- JCI has underperformed the S&P 500 Index, declining 13.86% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
-- Written by a member of TheStreet Ratings Staff