This Red-Hot Industrial Stock Looks Like a Good Value
There aren't many industries that have seen conditions significantly improve through 2022, but in the commercial building products sector, they have. In particular, current indicators in the HVAC (heating, ventilation, and air-conditioning) and building controls markets bode well for the upcoming earnings season. Investors looking to pick up bargain stocks will want to take a close look at Johnson Controls (NYSE: JCI) and, to a slightly lesser extent, keep an eye on Carrier (NYSE: CARR) and Trane Technologies (NYSE: TT).
I'm singling out Johnson Controls for two reasons. First, it has relatively high exposure to products in the commercial HVAC (41% of its sales in 2021, compared to just 13% for residential HVAC) and fire and safety (39% of sales in 2021) categories. Second, the company looks particularly interesting as an investment because its fall from grace in 2022 (it has underperformed key peers Carrier and Trane) came partly as a consequence of disappointing investors earlier in the year.
In a nutshell, management's initial guidance for its fiscal 2022 proved too optimistic, and the company was compelled to dial it back throughout the year. Having started its fiscal year with official guidance for earnings per share (EPS) in the range of $3.22 to $3.32, it's now forecasting EPS in the range of $2.98 to $3.02.
Source Fool.com
