One HVAC maker could see shares rally after a big pullback this year, according to Bank of America. BofA initiated coverage of Johnson Controls with a buy rating and $85 price objective, implying about 42% upside. "JCI has emerged as a leading global provider of HVAC, building controls, fire & security equipment, services, and software. The JCI story combines self-help, structural outgrowth driven by smart buildings controls and software, and US non-residential cyclical recovery," analyst Andrew Obin said in a note Monday. Shares of Johnson Controls are down 26.4% this year, compared with the S & P 500's 13.3% decline. "JCI has above-average growth prospects relative to our coverage and comparable returns but trades at a discount to multis and the HVAC and building automation peer group," Obin said. Johnson Controls is poised to benefit from the move toward decarbonization, BofA noted. The company is a leader in the smart buildings sector, which has a $38 billion total addressable market, which should grow at a compound annual growth rate of 14% from 2021 to 2030, according to BofA. "The company's solutions enable building owners to achieve operational/ energy efficiency as well as address tenant comfort health and safety. HVAC is a key driver of global decarbonization market which includes replacement driven by higher efficiency technology," Obin said. —CNBC's Michael Bloom contributed reporting.
People walk along Wall Street near the New York Stock Exchange on March 08, 2022 in New York City.
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