UBS upgrades Johnson Matthey on catalyst growth

05 February 2007 15:18  [Source: ICIS news]

(Updates and adds share prices)

 

LONDON (ICIS news)--UBS on Monday upgraded Johnson Matthey’s rating due to strong growth prospects in its autocatalysts business.

 

Johnson Matthey’s rating was increased to ‘Buy’ from ‘Neutral’, while UBS raised the price target to 1,800p ($35/€27) from 1,490p.

 

The UK group's earnings growth was expected to accelerate in the next five years at a time when earnings for most companies in the sector were decelerating or declining, said the analyst report.

 

It was thought to be underperforming the UK chemicals market by around 15%.

 

UBS expects a significant part of Johnson Matthey’s growth to come from autocatalysts, with new environmental legislation giving the market a higher degree of visibility.

 

The product was expected to see 12% growth in trading profits in the next five years.

 

UBS sees pharmaceuticals as another strong performer, where Satraplatin could enhance profit growth from 7% to 14% per year over the next five years.

 

Johnson Matthey shares soared nearly 6% on the London Stock Exchange from Friday’s close, reaching a 1,593p high.

 

(£1 = €2/£1 = €1.5)

By: Mark Watts
+44 20 8652 3214

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