Johnson Controls International's (JCI) shares have outperformed in 2024 and year-to-date, but the stock still has potential to rise, boosted by expected earnings growth going ahead, UBS analysts wrote in a Sunday note.

The brokerage said that Johnson Controls' earnings could surpass $6 per share in fiscal 2028, implying a compound annual growth rate of 20%, but noted that "much has to go right," including strategic action, for the company to realize this opportunity.

UBS said that a partial divestiture of certain assets is the most likely pathway for any potential strategic action. The brokerage said commentary from its fiscal Q3 earnings report implied divestitures of nearly 10% to 15% of its portfolio.

UBS expects the company to raise $3 billion to $6 billion by divesting lower-margin assets, with proceeds expected to be used for share repurchases.

UBS retains a $120 price target and buy rating on the stock.

Price: 103.78, Change: +0.26, Percent Change: +0.25