Zacks Investment Research upgraded Johnson Matthey plc (JMPLY) to a Zacks Rank #1 (Strong Buy) on Nov 23, 2013.
Why the Upgrade?
Growth seems to be on the cards for Johnson Matthey, taking into consideration the company’s performance in the first half of fiscal 2014 (ended Sep 2013) and roughly 53.8% increase in share price since the beginning of the fiscal year.
Johnson Matthey reported revenue increase in local currency, of 31% year over year while sales, excluding precious metals, increased 13% during the first half of fiscal 2014. Net income in the six months grew 15% and earnings per share reflected growth of 18%.
Revenue results were primarily driven by solid performance by Johnson Matthey’s Emission Control Technologies segment which reported a revenue increase of 13%. Process Technologies revenue grew 15% while Precious Metals sales were in line with the year-ago period. Fine Chemicals sales grew 5% and New Businesses segment sales were impressive.
Solid results in the first half of fiscal 2014 triggered an increase in earnings estimate for Johnson Matthey. In the last 7 days, the Zacks Consensus Estimate has gone up by 5.7% to $5.41 for fiscal 2014 and has increased 4.4% to $5.95 for fiscal 2015.
Long-term earnings growth rate for Johnson Matthey is estimated at 11.0%.
Other Stocks to Consider
Johnson Matthey is a $10.7 billion specialty chemicals company. Other players in the chemical diversified industry, which look attractive at current levels, include Methanex Corporation (MEOH), Asahi Kasei Corporation (AHKSY) and BASF SE (BASFY). While Methanex and Asahi Kasei carry a Zacks Rank #1 (Strong Buy), BASF holds a Zacks Rank #2 (Buy).
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