At The Motley Fool, we poke plenty of fun at Wall Street analysts and their endless cycle of upgrades, downgrades, and "initiating coverage at neutral." So you might think we'd be the last people to give virtual ink to such "news." And we would be -- if that were all we were doing.

But in "This Just In," we don't simply tell you what the analysts said. We'll also show you whether they know what they're talking about. To help, we've enlisted Motley Fool CAPS, our tool for rating stocks and analysts alike. With CAPS, we track the long-term performance of Wall Street's best and brightest -- and its worst and sorriest, too.

And speaking of the best ...
Three cheers for Johnson Controls (NYSE: JCI)! Hip! … do I hear another hip? Hurray? OK. Make that just one cheer.

As you've no doubt heard by now, Johnson Controls announced a "beat and raise" quarter last week, outstripping analyst profit estimates by $0.04 per share and promising to repeat the feat later this year, earning at least a nickel more than the Wall Street consensus -- and perhaps as much as $1.95 per share.

The news convinced Wall Street's R.W. Baird to up its rating on the stock to "outperform." But the rest of Wall Street held its applause.

Citi says it remains neutral on the stock, lifting its price target a bit, but still preferring shares of Magna (NYSE: MGA), Lear (NYSE: LEA), and Borg Warner (NYSE: BWA) as offering more "meaningful operating leverage to a global production recovery" alongside "appealing valuations and earnings upside potential." UBS declares itself "bullish" on Johnson's auto business, but more "cautious on building efficiency growth." Meanwhile, Goldman Sachs inched up its price target to $35 a share, but kept its rating at neutral.

So who's right here, Fools? Is it the ever-optimistic Baird? Or is it everybody else?

Let's go to the tape
Baird boasts one of the best records on Wall Street, ranking in the top 10% of investors we track, and scoring 53% for accuracy on its picks marketwide (which may not sound like much, but is actually quite a bit above the average.) Among the segments in which Johnson competes, Baird's accuracy ranges from a low of 48% (auto components) to 55% (machinery) to a high of 60% (in automotives, proper), and the banker has scored wins on such stocks as:

Companies

Baird's Rating

CAPS Rating
(out of 5)

Baird Picks Beating
S&P by

Gentex

Outperform

***

55 points (three picks)

Flowserve

Underperform

****

23 points

Caterpillar

Outperform

****

7 points

Plus, the last time Baird picked Johnson to outperform, it beat the market by 14 percentage points. And you know what? I'll just bet Baird can do it again.

Buy the numbers
"But Rich," you ask, "doesn't Johnson Controls cost too much?" And I'll admit, at the 20-times multiple that Yahoo! Finance shows the stock to be trading, Johnson does look a little pricey. But consider, first off, that it's trading for much cheaper considering next year's earnings, with a forward multiple of about 14 times.

Second, rivals like Ingersoll-Rand (NYSE: IR) and Lennox (NYSE: LII) both trade for higher P/E multiples (and Johnson's performance last quarter stands in marked contrast to Ingersoll's under-performance as it reported earnings less than analyst expectations.)

Last but not least, over on the cash flow statement we find Johnson generating free cash flow far in excess of its reported earnings -- $1.5 billion, in fact -- which gives the stock a much more reasonable-sounding multiple of 15.3 times to free cash flow. With a tidy 1.5% dividend to support it, and 15% long-term profits growth projected by the Street, I'd say the stock looks cheap today.

Foolish final thought
And going forward, Johnson could prove to be an even better bargain. As one of the three expected key battery producers for hybrid and electric cars in the U.S. -- and with significant scale of operations -- Johnson seems admirably placed to benefit from the surge of electric vehicles coming on the market, as Ford (NYSE: F), Nissan, and GM roll out their new rides. Top it all off with Johnson's recent win of the exclusive contract to supply Walmart with automotive batteries, and I think Baird's found a real winner here.

So Goldman, UBS, and Citi? Eat your hearts out. Baird's gotcha beat on this one -- and Johnson Controls is ready to motor.

Wal-Mart Stores is a Motley Fool Inside Value choice. BorgWarner and Ford Motor are Motley Fool Stock Advisor recommendations. The Fool owns shares of Flowserve. Fool contributor Rich Smith has no interest, short or long, in any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 663 out of more than 160,000 members. The Motley Fool has a disclosure policy.