Sustainable building solutions provider Johnson Controls (JCI) recently announced that the company has completed the offering of its first sustainability-linked bond worth $500 million in ten-year senior notes.
Following the news, shares of the company declined marginally to close at $75.31 in extended trade on Thursday.
With the pricing of this bond, the company remains on track with its green, social and sustainability-linked finance framework. The notable feature of this sustainability-linked bond is that the interest rate on the bond, which is to be paid to the bondholders, is linked to the achievement of certain environmental goals. If the company fails to achieve the same, it will have to pay a higher interest rate.
The CEO of Johnson Controls, George Oliver, said, “Governments alone will not be able to mobilize this sum of money, so private sector capital needs to get sustainable, and fast. Building the market for sustainable finance is therefore an imperative; and ensuring that the highest standards are met so that dollars flow to projects that truly accelerate decarbonization, is also critical.” (See Johnson Controls stock chart on TipRanks)
Recently, Morgan Stanley analyst Joshua Pokrzywinski reiterated a Buy rating on the stock with a price target of $87, which implies upside potential of 15.5% from current levels.
The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 8 Buys and 5 Holds. The average Johnson Controls price target of $80.54 implies that the stock has upside potential of 6.9% from current levels.
Johnson Controls scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained about 75.3% over the past year.
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