Allegion and Johnson Controls Downgraded: This Analyst Switches Stance Amid Market Challenges
Portfolio Pulse from Lekha Gupta
Mizuho Securities analyst Brett Linzey downgraded Allegion Plc (ALLE) and Johnson Controls International Plc (JCI) to Neutral from Buy, citing market challenges and mixed performance. ALLE's Q4 earnings beat expectations but sales missed, while JCI's Q1 revenues fell short with an adjusted EPS outlook revision. Linzey raised ALLE's price target slightly but maintained JCI's, expressing concerns over non-residential market signals and execution abilities.
February 23, 2024 | 6:28 pm
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NEUTRAL IMPACT
Allegion downgraded to Neutral by Mizuho Securities, with a slight price target increase to $141 from $140, despite Q4 earnings beat. Concerns over non-residential market and future earnings projections.
The downgrade reflects a more balanced risk/reward scenario for ALLE, despite a recent strong run. The slight price target increase suggests a positive view on the company's fundamentals but concerns over market conditions and future earnings potential limit upside.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 90
NEUTRAL IMPACT
Johnson Controls downgraded to Neutral by Mizuho Securities, maintaining a price target of $62. Q1 revenue miss and revised FY24 EPS outlook reflect execution and demand concerns, especially in China.
The downgrade and maintained price target indicate concerns over JCI's ability to execute and generate consistent cash flow, compounded by demand weakness in China. The EPS outlook revision underscores these challenges, impacting short-term investor sentiment.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 90