Johnson Controls - Comparative Multiple Analysis

Johnson Controls (Comparative Multiple Analysis)

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Notes on the Comparative Multiple Analysis of Johnson Controls

WikiWealth compares Johnson Controls's revenue, EBITDA, and EBIT multiples to their peers in order to determine the appropriate fair valuation. Click in the top right corner to experiment with Johnson Controls's comparative analysis.

Notes from the analysis:

1. WikiWealth uses quantitative measures to determine the multiple range for Johnson Controls.
2. Free cash flow to the firm (FCF) multiple is free cash flow to equity holders plus interest owed to Johnson Controls's debt holders.
3. Multiples incorporate benefits due to economies of scale; WikiWealth compares absolute enterprise value multiples to competitor's multiples.
4. WikiWealth excludes outliers when calculating individual company multiples.

Helpful Information for Johnson Controls's Analysis


How does this work? The Comparative Investment Analysis determines the value of Johnson Controls by comparing Johnson Controls financial ratios, prices, growth rates, margins, etc. to those of relevant peer groups.

Value Investing Importance? This method is widely used by investment professionals to determine the correct price of investments, especially initial public offerings (IPOs). It is one element of WikiWealth's three Wall Street approaches used to determine the correct fair value of Johnson Controls.

See the Johnson Controls cash flow (DCF) analysis for a completely different approach that's popular on Wall Street for determining the value of an investment in Johnson Controls.

Also, see the Johnson Controls's buffett intrinsic valuation analysis for WikiWealth's attempt to replicate the investing formula's used by Warren Buffett and Johnson Controls's valuation conclusion for a quick summary.