Broker snap: Uncertain future for Johnson Matthey

21st Jul 2010 11:39

Charles Stanley remains equivocal about the investment appeal of the shares of Johnson Matthey. despite a generally robust trading performance in the first quarter of the platinum refiner's financial year.The broker believes that Johnson Matthey's prospects are far from certain. "We note that US sales continue to perform positively, but that economic conditions are likely to deteriorate. We note, too, that Brazil sales have started to slip, for the first time in over a year while the European passenger car market remains extremely tough and that Asia remains highly competitive. More positively, truck production has held up well.," said Jeremy Batstone-Carr, director of private client research at Charles Stanley. The outlook statement indicates that despite easy fiscal second quarter comparative figures, prospects for the second half of the fiscal year remain hard to predict with any accuracy, in Batstone-Carr's view. The broker is sticking with its earnings estimates for the current year and maintaining its "hold" recommendation. "We recognise the potential benefits associated with future emissions legislation in heavy duty diesel but suspect that this is already well known by the market," the broker said.