Buffett Brain · Research note
Score updated 23 Oct 2026 · analysis from 26 Jul 2026
JCI· Industrials
Johnson Controls International
Johnson Controls struggles with low ROIC and weak margins, failing to meet Buffett's criteria for a wonderful business.
Buffett fit
Partial fit
Owner
27
Durability
70
Management
32
Price
23
Score updated 23 Oct 2026 · analysis from 26 Jul 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Industrials stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned Johnson Controls outright, I'd be concerned about the stagnant revenue growth and the 3.39% EPS CAGR over the last five years.
The full reasoning comes with a free account.
The 10-year outlook appears shaky, especially with a revenue CAGR of -0.08% over the last five years.
The full reasoning comes with a free account.
Management has reduced share count by 1.02% annually, which is a positive sign for .
The full reasoning comes with a free account.
With an yield of only 1.17%, it's clear that the price is not justified given the current earnings potential.
The full reasoning comes with a free account.
Free account
Read the full Johnson Controls International analysis free
- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
- Graham, Lynch and Greenblatt on the same stock
3 full analyses a week · no card needed
For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1Net margin of 14.5% places it in the top quintile of its sector.
- 2Management has successfully reduced share count by 1.02% annually over the last five years.
- 3Interest coverage ratio of 22.1 indicates strong ability to meet interest obligations.
- 4The company has maintained profitability for the last five years without a single loss.
Concerns
5- 1 of 9.5% is below the sector top-quintile cutoff of 13.6%, indicating weak capital efficiency.
- 2 of 36.6% is significantly below the top-quintile cutoff of 43.4%, suggesting issues.
- 3Revenue has experienced a slight decline with a CAGR of -0.08% over the last five years.
- 4 has decreased by 39.84% year-over-year, raising concerns about cash generation.
Price history
$143+94.9%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Johnson Controls operates in the building products and systems sector, generating $23.6B in revenue primarily from commercial and industrial clients. The company offers HVAC systems, building management solutions, and energy efficiency services. However, the has declined significantly, with a 39.84% drop year-over-year, indicating potential issues with cash generation. The unit economics appear strained, particularly in maintaining profitability amidst declining revenue.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 23, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Industrials
Questions about Johnson Controls International
- Is Johnson Controls International undervalued?
- Would Buffett buy Johnson Controls International?
- How strong is Johnson Controls International's competitive advantage?
- Is Johnson Controls International financially healthy?
- Is Johnson Controls International's dividend safe?
- Is Johnson Controls International halal?
Free weekly email
Liked the read on JCI? Get the next ones on Monday.
Every Monday: the stocks most of the seven investors newly agree on. One email, unsubscribe any time.
Research, not investment advice.
See the Buffett analysis of Johnson Controls International
The score, the checklist and the full reasoning open with a free account. You get 3 full analyses a week, and this stock is the first one. No card needed.
Create a free account3 full analyses a week · no card needed
Already have an account? Sign in