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1. Company Snapshot

1.a. Company Description

Johnson Matthey Plc engages in the clean air, catalyst and hydrogen technology, and platinum group metals (PGM) service businesses in the United Kingdom, Germany, rest of Europe, the United States, rest of North America, China and Hong Kong, rest of Asia, and internationally.It operates through three segments: Clean Air, Efficient Natural Resources, and Other Markets.The Clean Air segment provides catalysts for emission control after-treatment systems to remove harmful emissions from vehicles, as well as cars, other light duty vehicles, trucks, buses, and non-road equipment powered by diesel and gasoline.


The Efficient Natural Resources segment provides products and processing services for the use and transformation of critical natural resources including oil, gas, biomass, and platinum group metals; and circular economy solutions.This segment also offers specialty catalysts and additives; process technology and engineering design licenses; platinum group metal refining and recycling services, and chemical and industrial products; and other precious metal services.The Other Markets segment business portfolio includes precious metal pastes and enamels, battery systems, fuel cell technologies, battery materials, and green hydrogen; science and technology to develop the products for devices used in medical procedures; and detection, diagnostic, and measurement solutions.


The company was formerly known as Johnson & Cock and changed its name to Johnson Matthey Plc in 1851.Johnson Matthey Plc was founded in 1817 and is based in London, the United Kingdom.

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1.b. Last Insights on JMAT

Johnson Matthey's recent performance was driven by strategic partnerships and advancements in sustainable technologies. The company's alliance with Honeywell, GIDARA Energy, and SAMSUNG E&A to produce sustainable aviation fuel (SAF) has strengthened its position in the market. Additionally, Johnson Matthey's deployment of VelocityEHS Industrial Ergonomics resulted in a 97% reduction in recordable workplace injuries across its global sites. The company's dividend announcement of £0.55 also underscores its commitment to shareholder value. Its expertise in sustainable technologies and chemical manufacturing.

1.c. Company Highlights

2. Johnson Matthey's Half-Year Results: A Strong Turnaround

Johnson Matthey reported a significant improvement in its underlying operating performance, with a 38% increase in the first half. The company's Clean Air segment saw an 11% rise, while Platinum Group Metals (PGMS) was up 33%. Sales were modestly down due to a decline in Clean Air volumes, but the underlying operating profit showed a strong improvement. The company's earnings per share (EPS) came in at 0.512, slightly below estimates of 0.544. The net debt increased due to cash outflows related to Catalyst Technologies and the dividend payment.

Publication Date: Nov -25

📋 Highlights
  • Operational Performance Growth: Underlying operating profit rose 38%, driven by 11% in Clean Air and 33% in Platinum Group Metals (PGM).
  • Shareholder Returns: GBP 1.4 billion to be returned via special dividend/share consolidation and buybacks upon Catalyst Technologies sale closure in H1 2026.
  • Refinery Investment: GBP 350 million allocated for the new PGM refinery in Royston, set to start commissioning in March 2026 and fully operational by 2027.
  • Cash Flow Targets: GBP 250 million annual free cash flow target and GBP 200 million shareholder returns from 2026, with 1/3 dividends and 2/3 buybacks.
  • Clean Air Momentum: GBP 2 billion sales target for Clean Air secured via 90% contracted, with 12.4% margin in H1 and strong sustainable aviation fuel projects.

Financial Highlights

The company's financial results were marked by a strong performance from Platinum Group Metal Services, with a 33% increase in underlying operating profit. The Clean Air segment also saw a 200 basis point increase in margin. The new PGM refinery in Royston is on track to start commissioning in March 2026, with a capital expenditure of around GBP 350 million. Hydrogen Technologies is expected to break even by March 2026.

Cash Flow and Returns to Shareholders

The company's new cash-focused business model is being implemented, with a significant turnaround in cash flow in the first half. The sale of Catalyst Technologies to Honeywell is on track to close in the first half of 2026, with a return of GBP 1.4 billion to shareholders upon closure. The company aims to generate GBP 250 million of free cash flow going forward on a consistent basis.

Valuation Metrics

With a P/E Ratio of 8.76 and an EV/EBITDA of 7.87, Johnson Matthey's valuation appears reasonable. The company's Dividend Yield stands at 3.98%, indicating a relatively attractive return for investors. The ROIC of 10.12% and ROE of 15.82% suggest a strong return on investment.

Operational Progress

The company's Clean Air segment has made significant progress, with a 12.4% margin in the first half and a strong pipeline of new projects, particularly in sustainable aviation fuel. The Platinum Group Metals business has a strong outlook, with a target of £450 million in sales and a 30% operating margin by 2027-2028. The new refinery is on track to start commissioning by March 2026.

Outlook

The company expects to deliver on its promises for the full year, with PGMS expected to be down year-on-year in the second half due to low metal recoveries and higher maintenance costs. Analysts estimate next year's revenue growth at -7.9%, but the company's focus on its core competency of Platinum Group Metals and its new business model are expected to drive performance. With a strong emphasis on safety, customer satisfaction, and employee engagement, Johnson Matthey is well-positioned for future growth.

3. NewsRoom

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How Analyst Sentiment on Johnson Matthey Is Evolving With Recent Strategic Changes

Nov -25

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Should Income Investors Look At Johnson Matthey Plc (LON:JMAT) Before Its Ex-Dividend?

Nov -23

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Johnson Matthey PLC (JMPLF) (Half Year 2026) Earnings Call Highlights: Strong Growth in Clean ...

Nov -20

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Why Analysts Say Johnson Matthey’s Story Is Shifting With Higher Price Targets and Mixed Signals

Nov -09

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Is Johnson Matthey Plc (LON:JMAT) Trading At A 42% Discount?

Nov -08

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How Analyst Upgrades Are Shaping the Evolving Story at Johnson Matthey

Oct -25

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LYB Introduces New Polypropylene Copolymer ProFax EP648R

Oct -17

Source: zacks.com

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Why Analysts See Johnson Matthey’s Story Shifting Amid Rising Targets and Margin Gains

Oct -11

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.27%)

6. Segments

Platinum Group Metal Services

Expected Growth: 4.83%

Strong demand for platinum group metals (PGMs) in autocatalysts, driven by tightening emissions regulations and increasing adoption of hybrid and electric vehicles, coupled with growth in industrial processes and jewelry demand, contributes to Johnson Matthey Plc's 4.83% growth in PGM services.

Clean Air

Expected Growth: 5.4%

Clean Air from Johnson Matthey Plc is driven by increasing adoption of emission-reducing technologies, stringent government regulations, and growing demand for cleaner fuels. The segment benefits from its leadership in catalytic converters, diesel particulate filters, and selective catalytic reduction systems, which are essential for reducing emissions in the automotive and industrial sectors.

Catalyst Technologies

Expected Growth: 8.5%

Catalyst Technologies from Johnson Matthey Plc's 8.5% growth is driven by increasing adoption of electric vehicles, stringent emissions regulations, and growing demand for cleaner energy solutions. Additionally, the company's focus on R&D and innovation in fuel cell and battery technologies, as well as its strong partnerships with major automotive OEMs, contribute to its growth momentum.

Value Businesses

Expected Growth: 4.83%

Johnson Matthey Plc's value business growth of 4.83% is driven by increasing demand for clean air solutions, growth in electric vehicle adoption, and rising precious metal prices. Additionally, the company's diversified portfolio, operational efficiencies, and strategic investments in new technologies also contribute to its growth momentum.

Hydrogen Technologies

Expected Growth: 13.38%

Johnson Matthey Plc's Hydrogen Technologies segment growth of 13.38% is driven by increasing demand for clean energy, government incentives for hydrogen fuel cell adoption, and strategic partnerships to develop low-carbon hydrogen production solutions. Additionally, growing investment in hydrogen infrastructure and rising adoption in transportation and industrial applications contribute to the segment's growth.

7. Detailed Products

Emission Control Technologies

Johnson Matthey's Emission Control Technologies segment provides catalysts and pollution control systems for the automotive, truck, and bus industries.

Clean Air

Johnson Matthey's Clean Air segment provides catalysts and systems for industrial and stationary sources, such as power plants and industrial processes.

Precious Metal Products

Johnson Matthey's Precious Metal Products segment provides a range of precious metal-based products, including catalysts, chemicals, and electrical contacts.

New Markets

Johnson Matthey's New Markets segment focuses on developing new technologies and products for emerging markets, such as fuel cells, batteries, and hydrogen production.

Process Technologies

Johnson Matthey's Process Technologies segment provides catalysts, licensing, and services for the petrochemical, oil refining, and gas processing industries.

8. Johnson Matthey Plc's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Johnson Matthey Plc is medium due to the presence of alternative technologies and materials that can replace their products.

Bargaining Power Of Customers

The bargaining power of customers for Johnson Matthey Plc is low due to the company's strong brand reputation and the lack of buyer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Johnson Matthey Plc is medium due to the presence of multiple suppliers and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants for Johnson Matthey Plc is low due to the high barriers to entry, including the need for significant capital investment and technological expertise.

Intensity Of Rivalry

The intensity of rivalry for Johnson Matthey Plc is high due to the presence of several established competitors and the need to constantly innovate and improve products to remain competitive.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 38.17%
Debt Cost 8.81%
Equity Weight 61.83%
Equity Cost 8.81%
WACC 8.81%
Leverage 61.72%

11. Quality Control: Johnson Matthey Plc passed 0 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Johnson Matthey

A-Score: 5.4/10

Value: 5.9

Growth: 3.9

Quality: 4.1

Yield: 6.9

Momentum: 8.5

Volatility: 3.0

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Akzo Nobel

A-Score: 5.1/10

Value: 4.6

Growth: 4.8

Quality: 3.8

Yield: 5.6

Momentum: 4.0

Volatility: 7.7

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Arkema

A-Score: 4.7/10

Value: 7.3

Growth: 3.4

Quality: 3.2

Yield: 7.5

Momentum: 0.5

Volatility: 6.0

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Clariant

A-Score: 4.3/10

Value: 6.3

Growth: 3.7

Quality: 3.1

Yield: 6.9

Momentum: 0.0

Volatility: 6.0

1-Year Total Return ->

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IMCD

A-Score: 4.2/10

Value: 4.2

Growth: 6.6

Quality: 5.0

Yield: 3.1

Momentum: 0.5

Volatility: 6.0

1-Year Total Return ->

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Symrise

A-Score: 4.1/10

Value: 4.0

Growth: 6.1

Quality: 5.1

Yield: 1.9

Momentum: 0.0

Volatility: 7.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

20.0$

Current Price

20.0$

Potential

-0.00%

Expected Cash-Flows