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Why Sell Strategy is Apt for Johnson Controls (JCI) Stock

On Jul 3, Zacks Investment Research downgraded Johnson Controls International plc JCI to a Zacks Rank #4 (Sell).

The company’s strategy of divesting several businesses is adversely affecting its revenues and profits. Notably, in Mar 2017, Johnson Controls inked an agreement to sell its Scott Safety business to 3M Company MMM. Also, the company closed the divestiture of its ADT South Africa business in the same month. Besides, the separation expenses related to the spin-off of its Automotive Interiors business is proving to be costly for the company.

Additionally, deconsolidation of the automotive interiors business and negative foreign currency translation is affecting Johnson Controls’ results. In fact, revenues in the first half of fiscal 2017 were also adversely affected due to foreign currency translations.

In late April, Johnson Controls reported second-quarter fiscal...