22 November 2006 17:39 [Source: ICIS news]
LONDON (ICIS news)--Johnson Matthey performed in line with estimates, given the weaker US dollar and the potential for slower-than-expected growth in heavy duty diesel catalyst sales, Citigroup said in a note to clients on Wednesday.
The precious metals refiner and catalysts maker on Wednesday reported first half operating profits up 11% at £126.8m (€188m/$241.7m) compared with the same period last year on sales excluding precious metals sales up 17% at £744m.
Citigroup maintained its forecast of a catalysts profits compound average growth rate (CAGR) of 9% over the next five years.
Growth would be driven by Johnson Matthey's strong position in the heavy duty diesel market, although the bank cautioned that this market may not ramp up fully until 2008.
It also expected the pharmaceuticals division to recover strongly over the medium term.
Citigroup's mining analyst forecast strong platinum prices that will help drive profits from the precious metals division.
The bank said it believed the company was fairly valued and that earnings would have to be lifted further to drive the shares higher.
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