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Johnson Matthey Earnings: 2023 EBIT Declines Mainly Driven by Lower Platinum Group Metal Prices

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Securities In This Article
Johnson Matthey PLC
(JMAT)

Narrow-moat Johnson Matthey JMAT reported second-half EBIT of GBP 243 million, around 4% ahead of Vara consensus. However, EBIT for fiscal 2023 at GBP 465 million was down 21% and below the EUR 487 midpoint guidance. The decline was due to lower average platinum group metal prices with the remainder largely due to cost inflation and lower volumes in PGM services and clean air. This was partly offset by transformation benefits of GBP 45 million. Management remains confident over its 2025 targets. We don’t expect to make a material change to our GBX 2,200 fair value estimate. At current levels, shares look fairly valued.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Rob Hales

Senior Equity Analyst
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Rob Hales, CFA, is a senior equity analyst for Morningstar Holland BV, a wholly owned subsidiary of Morningstar, Inc. Based in Amsterdam, he covers the European chemicals sector, as well as the engineering and construction and pulp and paper industries.

Before joining Morningstar in 2015, Hales spent five years in equity research covering gold-mining stocks for BMO Capital Markets and CIBC World Markets. Previously, he worked for several years as a credit analyst for an energy trading company and a Canadian bank.

Hales holds a bachelor’s degree in business administration from Simon Fraser University and a master’s degree in business administration from the Ivey Business School at Western University. He also holds the Chartered Financial Analyst® designation.

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