Analysts at Berenberg lowered their target price on diversified chemicals group Johnson Matthey from 3,800.0p to 3,600.0p on Wednesday ahead of the firm’s interim results next month.
While Berenberg stated Johnson Matthey was on “the path to growth” over the long-term, it added that the stock’s valuation had “not yet caught up”.
As far as its cuts to JMAT’s price target went, Berenberg said declines in rhodium and palladium prices were responsible for the bulk of the reductions to its forecasts, with some related to autocatalyst volumes owing to the impact of semiconductor shortages.
On the potential market positioning of the company’s cathode material enhanced lithium nickel oxide batteries, Berenberg believes that JMAT’s eLNO technology can operate optimally at higher nominal voltages than today’s cathodes, which lends itself to use in more temperature resistant, semi-solid electrolytes that may run at higher voltages.
However, the German bank, which stood by its ‘buy’ rating on JMAT, noted that a drawback of the firm’s technology appears to be “the high capex intensity”, but it also acknowledged that this should fall by the mid-2020s, by which stage its process technology collaboration with Nano One Materials may bear fruit.