Johnson Matthey boosted by Credit Suisse upgrade

Speciality chemicals group Johnson Matthey got a boost on Thursday as Credit Suisse upgraded the stock to ‘outperform’ from ‘neutral’ and lifted the price target to 3,100p from 2,850p.

It said the market underestimates the strength of JMAT portfolios and undervalues the structural growth opportunity in automotive catalysis and battery materials.

In the same note, the bank added outperform-rated Umicore to its European Focus List and highlighted its preference for the Belgium-based company. It said Umicore has greater potential valuation upside, a better diversified portfolio and lower-risk growth options in battery materials.

Credit Suisse said JMAT has a leading position in catalysis but requires significant investment in battery materials to hedge the portfolio further.

CS noted JMAT has acquired a position in lithium ferrous phosphate cathodes and a power tools battery business, although it aims to pursue acquisitions into mainstream nickel manganese cobal technology.

“We believe Umicore has the more favourable market position in mainstream technology and has expertise in scaling NMC cathode material production. JMAT is a credible entrant, although we think it should move quickly to carve out a sustainable market share.”

At 0936 BST, JMAT shares were up 2.6% to 2,897p.