Johnson Controls (NYSE:JCI) Down on Weak Auto Margins

Although Johnson Controls (NYSE:JCI) was able to beat estimates, their weak auto margins weigh on the share price of the company, and was the only segment of Johnson Controls not to get a raise in guidance.

UBS says, "Though EPS of $0.55 was a beat the stock traded down on weaker auto margins, which missed our estimate and was also the only segment that did not get a margin guidance raise. Though JCI attributed this to M&A dilution, we felt commentary surrounding the rate of recovery in AE was slower than expected. Importantly, JCI does not expect Europe AE to return to pre-downturn margins of 6-7% until 2015.

"Our 2011 EPS estimate moves to $2.60 from $2.50 previously, reflecting higher BE growth and improved BE and PS margins. 2012 moves to $3.30 from $3.20; 2013 moves to $3.95 from $.3.85; and 2014 moves to $4.55 from $4.50."

UBS maintains a "Neutral" rating on Johnson Controls (JCI), which was trading at $38.76, dropping $0.04, or 0.10 percent, as of 2:44 PM EST. UBS raised their price target on Johnson Controls from $38 to $40.