J.P. Morgan Lowers Price Target on Johnson Controls (JCI)

J.P. Morgan is out with a research report this morning, where it reiterates its Neutral rating on Johnson Controls JCI; it also lowered its price target to $34.00, from $38.00. The JPM analysts said, “We leave our FY2010e EPS unchanged at $2.00 (slightly higher than guidance of $1.95), but lower our 2011e EPS slightly to $2.60 (vs. $2.65 earlier) as we moderate the pace of BE volume recovery and tweak our vehicle production forecasts across the regions in 2011 (2012 stays unchanged at $3.20). Friday JCI shares fell -4.5% (S&P500 down -0.8%) after the company reported F3Q EPS of $0.55, in line with JPM/consensus.” They added, “Lower BE revenues/profits were offset by higher-than-expected income from Automotive (though margins in North America were disappointing for the reasons discussed below) and Power Solution. While BE backlog was sequentially up again (and orders were +9% y/y in F3Q), current period BE revenue trends suggest recovery in this unit will be drawn out, partly because Service related revenues (along with Europe) are showing sizable revenue pressure.”