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Shares in Johnson Matthey climb 4.5 percent to top the list of FTSE100 gainers, with traders citing a note by JP Morgan, in which the bankupgrades the maker of catalytic converters to "overweight" from "neutral" andsees a potential upside of 35 percent to the current price, as the main driver.
"Johnson Matthey is at an inflection point," JP Morgan says in a note. "Weexpect years of investment in the industrial catalyst market to lead toaccelerated growth, benefiting from the swathe of new customer capex driven byChinese petrochemical self-sustainability and the U.S. shale gas revolution."
A third of the company's revenues, which are expected to top 11.2 billionpounds for the full-year 2014, are exposed to the United States, while 14percent are focused towards China and Hong Kong, according to Thomson Reutersdata.
The U.S. investment bank lifts its earnings per share estimates by up to 6percent for 2015 and 2016, raises its Dec. 2014 target price to 4,000 pence from2,800 pence and adds Johnson Matthey to its analyst focus list.
Johnson Matthey shares have outperformed the benchmark FTSE 100 by 20percent in the year-to-date, but analysts covering the stock remain relativelycautious with 10 out of 16 rating the stock as "hold" with the other 6recommending investors "buy" the shares.
Johnson Matthey is one of the least shorted stocks on the FTSE 100 ranked63rd out of 100, according to data from Markit, with just 1.4 percent of sharesavailable being utilised for loans.
Reuters messaging rm://david.brett.thomsonreuters.com@reuters.net
