LONDON (ShareCast) - (Sharecast News) - Deutsche Bank downgraded its stance on shares of specialty chemicals company Johnson Matthey to 'hold' from 'buy' and cut its price target to 2,200p from 2,700p after full-year results on Thursday.
The bank said it likes the group's well-run asset base - with a high degree of variable costs in Clean Air - strong balance sheet and liquidity position, and management's ongoing focus on organisational efficiencies, all of which were highlighted in the results.

However, it has downgraded the stock for two key reasons.

"1) We expect an increasing ramp-up of cathode supply globally closer to 2024, JMAT's targeted commercial launch of its novel eLNO cathode material, unfavorably shifting the 'crunch point' of price pressure in the industry," it said.

Secondly, it expects a delay in benefits from growth investments made in Clean Air as automotive production does not meaningfully pick up over the short/medium term, in addition to potential for delayed phasing in of some emission standards.

Johnson Matthey announced on Thursday that it will cut 2,500 jobs and halve its dividend.

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