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Investing.com - JPMorgan upgraded Johnson Matthey PLC (LON:JMAT) (OTC:JMPLY) from Neutral to Overweight on Friday, raising its price target to GBP22.50 from GBP18.60. The stock has delivered impressive returns of nearly 58% year-to-date and is currently trading at $50.64, which InvestingPro analysis suggests is undervalued based on its Fair Value assessment.
The investment bank increased its adjusted EBIT estimates for Johnson Matthey’s continuing operations by 11%, 6%, and 6% for fiscal years 2026, 2027, and 2028, respectively. These new projections place JPMorgan’s estimates slightly above the prevailing Vara consensus. The company, with a market capitalization of $4.37 billion, reported EBITDA of $698 million for the last twelve months.
JPMorgan cited tailwinds from higher metal prices and Johnson Matthey’s reiteration of its fiscal 2026 Clean Air margin guidance of 14-15% as key factors behind the upgrade. This guidance exceeds JPMorgan’s previous, more cautious estimate of 12% margin. The company currently trades at an EV/EBITDA ratio of 7.98x and maintains a healthy current ratio of 1.65.
The company has expressed confidence in its ongoing cost efficiency and commercial excellence initiatives, including net pricing management measures, which aim to increase the Clean Air business margin to 16-18% by fiscal 2028. Johnson Matthey offers a dividend yield of 2.2%, though dividend growth has declined by 59.48% in the last twelve months.
JPMorgan noted that its fiscal 2027 adjusted EBIT estimate could see an additional 2% upside potential (4% above consensus) if using JPMorgan’s commodity team forecasts for platinum and palladium for 2026. Investors looking for deeper insights should note that Johnson Matthey’s next earnings report is scheduled for February 19, 2026. InvestingPro subscribers can access additional metrics and ProTips to better evaluate the company’s prospects ahead of this important date.
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