Johnson Controls shares slide on downgrade

Shares of automotive and building systems maker Johnson Controls Inc. fell sharply Thursday after an analyst lowered his rating to "Hold" from "Buy," suggesting that the company's stock is fairly valued.

In a note to clients late Wednesday, Deutsche Bank analyst Rod Lache said shares of the Milwaukee-based company have risen 161 percent since he upgraded it to "Buy" in March. Those gains far outpace the broader Standard & Poor's 500 index, which has risen only 23 percent during that period.

At the time of the upgrade, Lache expected Johnson Controls to mitigate problems in its automotive segment and navigate a slowdown in its power solutions and building efficiency businesses.

The efficiency unit works to increase energy efficiency and performance in commercial, industrial and residential buildings, according to the company's Web site. Johnson's power business focuses on creating lead acid batteries for a variety of different vehicles.

While the auto segment should return to profitability by year end, the building efficiency results could remain weak in the short term, Lache said. He wrote that the company's current valuation reflects its outlook.

He increased his price target to $23 from $20.

Shares of the company fell $2.03, or 8.9 percent, to $20.72 in midday trading.