US Electrical Equipment & Multi-Industry: JCI very strong; VRT a compelling buy opportunity

Research evidence excerpt

US Electrical Equipment & Multi-Industry: JCI very strong; VRT a compelling buy opportunity

Global Research

30 July 2026ab

US Electrical Equipment & Multi-Industry Equities

AmericasJCI very strong; VRT a compelling buy

opportunity Industrial, Diversified

Amit Mehrotra

Analyst

amit.mehrotra@ubs.com

We are reiterating our Buy rating on JCI and VRT following yesterday’s results. JCI +1-201-352 1410

outperformed after reporting better growth and margins and raising full year

Neal Burk

expectations. VRT deeply underperformed after revenue growth came in lighter than

expected, which we attribute to short-term timing as opposed to fundamentals. We neal.burk@ubs.com

have raised our estimates for both companies and see meaningful upside for both over +1-212-713 4066

the next 12 months.

Pratap Singh

JCI: We remain positive on JCI shares following results. Both revenue and margins Analyst

were better, and the company raised growth and earnings expectations for the pratap-za.singh@ubs.com

+1-212-821 3112 remainder of the year. As we noted before, we see meaningful double digit

revision opportunity to fiscal 2027 expectations….and today’s disclosures likely Zachary Walljasper

allow us to take a medium-sized step in that direction. Associate Analyst

zachary.walljasper@ubs.com

With respect to the quarter, JCI organic growth was 10% year over year vs. our +1-212-713 9829

model of +7% and guidance of +6%. Americas growth was low double digits and

margins eclipsed 21% for the first time, ever, which reflects the better revenue

growth as well as cost initiatives. Incremental margin through the segment

earnings line was above 40% for the second straight quarter. Orders increased

27% in the quarter while backlog was up 32% year over year. Said another way,