CORK, Ireland - Johnson Controls (NYSE: NYSE:JCI), a global leader in smart building solutions, announced today that its CEO, George R. Oliver, is set to retire. The company's board of directors has initiated a comprehensive search for his successor with the help of an executive search firm. Oliver will remain in his current role until an appointment is made and will continue as chair of the board thereafter to ensure a smooth transition.
Oliver, who has been at the helm of Johnson Controls since 2017, led the company through a significant transformation, focusing on smart technology for commercial buildings. "I am proud of the remarkable success we have achieved... to position our company as a pure-play provider," Oliver stated. Jürgen Tinggren, the company's lead independent director, commended Oliver for his leadership and vision, which have optimized the company to deliver greater value.
In a related move, Johnson Controls has appointed Patrick Decker, former president and CEO of Xylem Inc (NYSE:XYL)., as a new independent director, effective immediately. This appointment is part of the board's ongoing refreshment efforts and follows constructive dialogue with Elliott Management, one of the company's largest investors.
Marc Steinberg, Partner at Elliott, expressed confidence in the leadership and board actions, noting the company's solid positioning for future growth and shareholder value creation.
George Oliver's tenure at Johnson Controls began as president and chief operating officer before becoming CEO, following the merger with Tyco in September 2016. His previous roles include CEO of Tyco and various leadership positions at General Electric (NYSE:GE).
Patrick Decker brings extensive experience to the board, having transformed Xylem from an industrial products company to an enterprise focused on advanced technology, services, and solutions.
Johnson Controls, with a history of nearly 140 years, aims to redefine building performance with its comprehensive digital offering, OpenBlue, and a global team of 100,000 experts.
The information for this article is based on a press release statement.
In other recent news, Johnson Controls has been actively reshaping its business portfolio. The company has announced the sale of its heating and ventilation business units to Bosch Group, a transaction valued at $6.7 billion. The sale includes Johnson Controls' residential and light commercial heating, ventilation, and air conditioning assets, significantly altering its business alignment.
In a separate development, Johnson Controls has also agreed to divest its Air Distribution Technologies segment to Truelink Capital. This move is part of Johnson Controls' ongoing efforts to streamline its operations and focus on core business areas.
Analysts have been closely monitoring these changes. Barclays has increased its price target for Johnson Controls shares to $62, citing a recent re-rating among the company's peers. However, the firm maintains an Equalweight rating on the stock, indicating a neutral stance. Citi has also kept a Neutral position on Johnson Controls, with a consistent price target of $66.
The company is also reportedly contemplating a $3.16 billion stake sale in its air-conditioning joint venture with Hitachi (OTC:HTHIY), and has launched tender offers to repurchase up to $90 million of its outstanding senior notes.
InvestingPro Insights
As Johnson Controls (NYSE: JCI) begins its search for a new CEO to succeed George R. Oliver, the company's financial health and market performance remain key points of interest for investors and analysts alike. According to InvestingPro data, Johnson Controls currently boasts a market capitalization of $49.03 billion, reflecting its significant presence in the industry.
InvestingPro Tips indicate that Johnson Controls has a track record of maintaining dividend payments, having done so for 54 consecutive years, which speaks to its financial stability and commitment to shareholder returns. Additionally, the company is a prominent player in the Building Products industry, which aligns with its strategic focus on smart technology for commercial buildings.
Looking at the numbers, Johnson Controls is trading at a price-to-earnings (P/E) ratio of 29.29, suggesting a higher valuation relative to near-term earnings growth. This may be a point of consideration for investors weighing the company's growth prospects against its current earnings. The P/E ratio adjusted for the last twelve months as of Q2 2024 stands at 22.99, with a price-to-book ratio of 3.14, indicating the market's valuation of the company's net assets.
Despite challenges such as short-term obligations exceeding liquid assets, which could impact liquidity, the company has demonstrated profitability over the last twelve months, with a gross profit margin of 32.84% and an operating income margin of 7.67%. Furthermore, with a notable price uptick of 32.48% over the last six months, the company's stock performance has been robust, attracting investor attention.
For those interested in a deeper dive into Johnson Controls' financials and strategic outlook, InvestingPro offers additional insights and tips, which can be found at https://www.investing.com/pro/JCI. With more than five additional InvestingPro Tips available, investors can gain a comprehensive understanding of the company's financial health and market position.
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