Broker snap: Motor manufacturers' ills to hit Johnson Matthey
21 Nov 2008
Autocatalyst provider is likely to be less bullish about its prospects when it declares interim results next Wednesday, given the dramatic collapse in the sales of new cars worldwide.
"In June, management had referred to a strong start to the year, and forecast another good year of growth. However, much has changed since then, and while the structural driver of tightening legislation remains in place, others - such as high energy and metals prices - have reversed sharply," says JP Morgan analyst Neil Tyler.
Tyler is forecasting revenue for the six months to 30 September of £2,801m, operating profit of £135.8m, profit before tax of £123.5m and earnings per share of 43p. It expects the company to leave the interim dividend unchanged at 10.9p.
The poor state of the car market has prompted JP Morgan to cut its price target from 1400p to 1000p.
"Long term, we view JM's business as offering solid structural growth, but remain Neutral until we gain better visibility over global automotive landscape upon which growth opportunities are based," the US bank said.
