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Highlights

  • Target price increased from 1,800p to 1,950p following 40% YTD share price rise
  • Divestment, clean air margin gains, and PGM prices cited as key performance drivers
  • Valuation seen as fair for a cash-focused, ex-growth asset despite earnings upgrades

Berenberg analysts have reiterated a ‘Hold’ rating on Johnson Matthey Plc (LSE: JMAT) while raising their price target from 1,800 pence to 1,950 pence. The revision follows what the firm described as one of the more notable share price performances in the chemicals sector in 2025, with Johnson Matthey up 40% year-to-date.

About half of this gain, according to Berenberg’s analysis, is attributed to the company’s recent sale of its catalysts technologies segment, a move described as a "well-received divestment". The remaining uplift has been split between favourable movement in platinum group metal (PGM) prices and improved margins in its Clean Air division—contributing approximately 35% and 15% respectively to the performance.

Johnson Matthey, which focuses on chemicals and sustainable technologies, also stands to benefit from volatility in PGM markets. Berenberg indicated that consensus underlying earnings forecasts appear understated, citing a mid-single-digit percentage gap relative to its own projections for the coming years.

Despite these adjustments, the firm has opted to maintain its neutral stance on the stock. “The shares have run hard,” noted Berenberg, pointing to the expectation of increased PGM supply with the launch of the Platreef project in 2026 as a potential cap on pricing upside.

Earnings per share forecasts for FY26 and FY27 have been adjusted upward to reflect improved pricing dynamics in the PGM Services segment. However, Berenberg concluded that the current valuation remains balanced, noting that Johnson Matthey trades on an estimated FY27 enterprise value to EBITDA multiple of approximately 6x and a free cash flow yield slightly above 10%.

Berenberg’s position underscores a measured outlook, acknowledging short-term earnings support while also highlighting longer-term supply-side pressures and growth constraints.