Broker tips: Johnson Matthey, Fresnillo
By Michele Maatouk
Date: Monday 05 Jan 2026
(Sharecast News) - Johnson Matthey shot higher on Monday after Berenberg upgraded the shares to 'buy' from 'hold' as it highlighted the stock's correlation with precious metal proxies and potential for consensus earnings upgrades.
The bank, which lifted its price target to 2,550p from 2,050p, said Johnson Matthey remains one of the few names in the European chemicals sector where upgrades to consensus EBIT are distinctly more plausible than downgrades in 2026.
"In contrast to the oversupplied market for industrial chemicals, the platinum group metals (PGM) market remains tight," it said.
"Shares have begun to correlate with proxies for the well-underpinned gold price. The capital intensity of Johnson Matthey is declining and its cash flows are improving."
Berenberg noted that Johnson Matthey has correlated heavily with US real yields over the last 12 months, suggesting shares may be similarly well-supported as gold.
"The risk with moving to a buy rating after the strong calendar year 2025 performance of shares (+c60%) and the rally in PGM prices is that we are too late to the PGM-driven upgrade cycle. We are relaxed about this," it said.
Berenberg said its metals & mining team's 2026 outlook for gold suggests a consolidation of gains over the coming year.
"Johnson Matthey's share price shows a strong inverse correlation with US real yields (10-year government bond yields minus inflation expectations). Real yields are a measure of the opportunity cost of holding gold, and future curves suggest that this cost may increase only marginally over the next year.
"In other words, if Johnson Matthey and the PGMs more broadly are increasingly considered as an alternative to gold, then the price of both appears well-supported."
Elsewhere, Citi lifted its price target on Fresnillo to 3,900p from 3,000p and reiterated its 'buy' recommendation on the precious metals miner as it raised estimates for earnings and cash flow to factor in higher silver and gold prices.
Citi now forecasts 2026 EBITDA at $3.9bn, up 27% versus a year earlier, while 2026 free cash flow is expected at $2.1bn, up from $1.6bn in 2025.
"Our base case estimates are based on $58 and $4,375 silver and gold prices, compared to spot prices at $80 and $4,562," the bank noted. "Our revised EBITDA and FCF estimates for 2026 could be higher between 28-32% on spot commodity prices, implying a solid mark-to-market momentum for the stock."
Citi said it sees Fresnillo paying a $1bn cash dividend in 2026, while a $0.6bn outflow for the Probe Gold acquisition "is likely to build a solid pipeline for organic growth".
It said the valuation at 7.7x 26 estimated EBITDA and a 6.8% FCF yield are attractive even after a rally of more than 400% year-to-date.
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