Johnson Matthey’s (GB:JMAT) shares reacted positively yesterday after the company received a rating upgrade from Deutsche Bank along with a higher price target. Overall, the stock has a Moderate Buy rating from analysts. YTD, the shares have experienced a decline of 14%.
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Johnson Matthey is a manufacturing company that offers products and technologies to the automotive, pharmaceutical, and chemical industries. The company operates more than 40 manufacturing plants worldwide.
Upgraded to Buy
Analyst Tim Jones from Deutsche Bank upgraded his rating on the stock from Hold to Buy. He also raised his price target from 2,300p to 2,500p, implying an upside potential of more than 40% in the share price.
Analysts from Deutsche Bank are bullish on the company’s prospects and believe that the new management could “unlock significant value” for its shareholders. Other catalysts for the share price include the transition to hydrogen and battery materials and exiting the battery business, among others.
Jones also placed his bet on the company’s hydrogen technology, which could drive higher earnings growth. The company aims to achieve higher earnings (EBIT) from its growth businesses by the early 2030s, surpassing the current business mix in terms of profitability. On the flip side, investors remain concerned about the rising prices of platinum group metals, which are essential components in the production of catalytic converters.
According to the bank’s forecasts, there could be a projected decline of 1% to 17% in EPS for 2024-2025. However, looking further ahead, the forecasts predict a positive outlook with expected growth of 8% to 12% in earnings per share for 2026-2027.
Is Johnson Matthey a Good Investment?
JMAT stock has a Moderate Buy rating on TipRanks, backed by four Buy and five Hold ratings. The average price forecast is 2,100p, which is 18.9% higher than the current trading level.
