Abstract
Johnson Controls will report fiscal Q1 2026 results on February 04, 2026 Pre-Market. The preview assesses expected revenue, margin trajectory, EPS, and segment dynamics based on company forecasts and recent performance, alongside majority bullish institutional opinions from large sell-side firms during the past six months.
Market Forecast
The market’s current consensus indicates Johnson Controls’ fiscal Q1 2026 revenue of $5.64 billion, gross profit margin trajectory improving from last quarter’s level, net profit margin stabilization, and adjusted EPS of $0.84, all implying year-over-year growth of 6.65% for revenue and 42.66% for EPS and 30.99% for EBIT. The company’s core building products and systems franchise remains the key revenue anchor, while services continue to deepen recurring revenue and retrofit activity; products and systems carry the near-term highlight with demand in HVAC, fire, and controls tied to modernization cycles. The most promising segment is products and systems at $4.45 billion last quarter, which set the base for growth; services at $1.99 billion maintained mix balance, with stable YoY contribution.
Last Quarter Review
Johnson Controls delivered fiscal Q4 2025 revenue of $6.44 billion, gross profit margin of 36.49%, GAAP net profit attributable to the parent company of $1.69 billion, net profit margin of 26.28%, and adjusted EPS of $1.26, with year-over-year revenue decline of 12.88% and adjusted EPS decline of 1.56%. A notable highlight was quarter-on-quarter net profit growth of 141.51%, reflecting margin resilience and cost execution even against a softer top line. Main business highlights showed products and systems revenue of $4.45 billion and services revenue of $1.99 billion, underscoring solid demand for building solutions and a meaningful recurring service base.
Current Quarter Outlook (with major analytical insights)
Main Business: Products and Systems
Products and systems form the backbone of Johnson Controls’ results this quarter, anchored by HVAC, building controls, fire, and security portfolios. The estimated revenue path implies mid-single-digit growth against the prior year and a sequential reversion from fiscal Q4’s seasonal peak, supported by retrofit and modernization demand across commercial buildings. Given the company’s guidance for adjusted EPS of $0.84 and EBIT growth of 30.99%, the product mix likely tilts toward higher-value controls and integrated solutions that carry attractive incremental margins. With gross margin last quarter at 36.49%, cost productivity and pricing discipline are positioned to sustain or modestly expand margins as component inflation and logistics pressures show signs of normalization. The net profit margin profile implied by the forecast suggests operating leverage from product volumes and better service attachment rates, though regional project timing could introduce variability. Execution on backlog conversion and delivery schedules will be crucial to bridge seasonal effects and capture the forecasted year-over-year expansion.
Most Promising Business: Services
The services franchise, including maintenance, retrofit, and performance contracting, is positioned to add resilience and visibility to quarterly earnings. Last quarter’s $1.99 billion in service revenue provides a stable base, and the estimate trajectory indicates services can contribute to the guided EPS uplift through higher-margin, recurring contracts. Service pull-through from installed products supports lifecycle economics, while retrofit opportunities tied to energy efficiency, building automation upgrades, and fire/security compliance add incremental bookings. The margin structure of services typically contributes positively to consolidated profitability, with lower capital intensity and better schedule control relative to large project deliveries. This quarter, service mix is likely to mitigate swings in project timing, supporting EBIT expansion and EPS momentum even if regional product demand shows unevenness. Sustained attachment to existing installed base and cross-sell of digital offerings should underpin year-over-year growth consistent with the consolidated revenue estimate.
Stock Price Drivers This Quarter
Stock performance will be most sensitive to delivery against margin and EPS guidance, specifically whether adjusted EPS of $0.84 and EBIT growth near 30.99% materialize alongside revenue growth of 6.65%. Investors will watch gross margin relative to the 36.49% reported in fiscal Q4 2025, as pricing, mix, and productivity are key to validating operating leverage. Segment mix between products and systems versus services will influence margin outcomes; stronger services mix could bolster profitability, while heavier large-project exposure might raise timing risk. Another driver is the pace of backlog conversion, where consistent delivery schedules translate directly into quarterly revenue and cash generation. Finally, any signals on retrofit demand tied to energy efficiency and building modernization will shape views of sustainability of the forecasted EPS trajectory into subsequent quarters.
Analyst Opinions
Institutional sentiment over the past six months is predominantly bullish. Multiple large sell-side firms maintained Buy ratings, including Morgan Stanley and J.P. Morgan, with reiterated price targets between $125.00 and $138.00. Morgan Stanley’s Christopher Snyder maintained Buy ratings with targets of $125.00 and later $130.00, reflecting confidence in earnings momentum from margin execution and backlog conversion, while J.P. Morgan’s Stephen Tusa reaffirmed a Buy rating with a $138.00 target, highlighting earnings resilience and improving growth visibility. The ratio of bullish to bearish opinions skews toward bullish, with no prominent bearish updates reported in the period, making the majority view supportive of upside to near-term performance. Analysts point to the estimated adjusted EPS of $0.84 and revenue growth of 6.65% as achievable benchmarks, contingent on disciplined pricing, cost control, and service-led mix stability. They emphasize that successful delivery on the forecasted EBIT growth of 30.99% would validate margin expansion efforts and underpin confidence in the company’s fiscal 2026 earnings path.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Comments