Broker tips: Johnson Matthey, G4S, Polymetal

6th Jun 2013 11:09

Bank of America Merrill Lynch (BofA) has upgraded its forecast for platinum refiner and chemicals group Johnson Matthey from 'neutral' to 'buy' after the company's forecast-beating full-year results on Thursday morning.BofA highlighted that the stock has underperformed the wider sector by 9.0% and the European market by 3.0% over the last 12 months. "We now see an EPS upgrade cycle, given successful cost management in the second half, four-five months of stronger truck orders in the US and some improved 1Q13 data in Europe for truck book-to-bill's."UBS has cut its target price for security solutions group G4S from 280p to 240p after lowering its earnings forecasts for the next three years due to a re-basing of margin assumptions.The broker said that while G4S appears cheap on earnings multiples, the valuation looks full on cash metrics, especially after accounts for the dilutive impact of further potential disposals. UBS has maintained a 'neutral' rating for the stock.Canaccord Genuity has kept its 'buy' recommendation and 920p target for Russian precious metals miner Polymetal after the company's upbeat update on exploration at its Maminskoye project in the Sverdlovks region.The broker's 920p target price for the shares is set on a net present value at estimated peak gold prices of $1,750/oz. At spot prices, the stock trades at a premium to the sector though the broker reckons that this is "warranted given the group's higher grade production and reserves, capital discipline and free cash flow generation".