NEW YORK (TheStreet) -- Shares of Johnson Controls  (JCI) rallied more than 4% on Wednesday after the company said it is considering spinning off its automotive business and has hired financial advisers including Goldman Sachs  (GS) to assist in the process.

The move "continues our strategy of proactive portfolio management to drive focus on strategic product-oriented businesses where we can be a global market leader, drive more profitable growth and deliver maximum long-term value for our customers and shareholders," Chairman and Chief Executive Officer Alex Molinaroli said in a statement.

The auto parts supplier said there was no concrete timeline for its strategic review, which would include a "full range" of options. In addition to Goldman Sachs, Johnson Controls also retained Centerview Partners to serve as financial advisors and Wachtell, Lipton, Rosen and Katz to serve as legal advisor.

Johnson Controls' automotive division was responsible for 51% of its total net sales during its 2014 fiscal year, according to the company's annual report. The operation manufacturers auto interior parts, conducting business in 32 countries.

Shares of Johnson Controls have returned over 11% since the start of the year, with a market capitalization of $33.6 billion.

Morgan Stanley analysts maintain an underweight/cautious rating on Johnson Controls stock, while RBC Capital Markets and Robert W. Baird & Co. hold an outperform rating. Wells Fargo Securities maintains a market perform rating.


TheStreet Ratings team rates JOHNSON CONTROLS INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate JOHNSON CONTROLS INC (JCI) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow."

You can view the full analysis from the report here: JCI Ratings Report

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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