- Johnson Control (JCI -0.1%) is downgraded to Sell from Neutral with a $35 price target at Goldman Sachs (NYSE:GS), which calls the stock a "potential value trap."
- Analyst Joe Ritchie says many of the issues which plagued JCI throughout 2017 likely will continue into 2018, including EPS growth that likely will trail its peers at 7% vs. an average of 11% for its peers, expectations for a 2.4% organic growth rate vs. a group average of 4%, a "subpar" free cash flow conversion, and below-average cash return on capital invested.
- The analyst says he would be more positive "if JCI improved its working capital metrics, organic growth accelerated (especially in buildings), higher cost-outs drove better incremental margins and/or JCI conducted accretive portfolio actions."
- Ritchie also downgrades Flowserve (FLS -1.3%) to Sell, citing concerns over free cash flow and his belief that consensus expectations are aggressive.
- Now read: Daily Insider Ratings Round Up 11/24/17: PSEC, JCI, BMRC
Original article