Johnson Matthey (JMPLY) AI Stock Analysis

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Johnson Matthey

(OTC:JMPLY)

70Outperform

Johnson Matthey's overall score is driven primarily by its stable cash flow and undervaluation, despite challenges in revenue and profitability. The strategic focus on growth areas such as Catalyst Technologies and cost-saving initiatives provides a positive outlook. However, technical indicators suggest short-term caution due to recent downward momentum.

Johnson Matthey (JMPLY) vs. S&P 500 (SPY)

Market Cap

$2.59B

Dividend Yield6.25%

Average Volume (3M)1.81K

Price to Earnings (P/E)4.1

Beta (1Y)0.98

Revenue Growth-12.54%

EPS Growth215.95%

CountryUS

Employees11,685

SectorBasic Materials

Sector Strength60

IndustryChemicals - Specialty

Share Statistics

EPS (TTM)7.44

Shares Outstanding83,919,395

10 Day Avg. Volume3,412

30 Day Avg. Volume1,814

Financial Highlights & Ratios

PEG Ratio0.02

Price to Book (P/B)N/A

Price to Sales (P/S)0.18

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Johnson Matthey Business Overview & Revenue Model

Company DescriptionJohnson Matthey (JMPLY) is a global leader in sustainable technologies, serving various sectors including automotive, chemicals, pharmaceuticals, and energy. The company specializes in the production of catalysts and advanced materials, with a focus on reducing emissions and improving the efficiency of industrial processes. With a commitment to innovation and sustainability, Johnson Matthey develops technologies that enhance the performance and efficiency of its customers' products and processes.

How the Company Makes MoneyJohnson Matthey makes money by leveraging its expertise in chemistry and materials science to create high-performance products that meet the needs of its diverse customer base. The company's key revenue streams include the sale of catalytic converters for automotive emission control, which is a critical component in meeting stringent environmental regulations. Additionally, Johnson Matthey generates income through its advanced materials division, producing specialized chemicals and materials for industries like pharmaceuticals and energy. The company also engages in strategic partnerships and collaborations to drive innovation and expand its market reach, further contributing to its earnings.

Johnson Matthey Financial Statement Overview

Summary

Johnson Matthey faces declining revenue and profitability challenges, impacting its growth trajectory. However, it maintains a stable balance sheet with reasonable leverage and a strong equity base. The positive shift in cash flow patterns highlights improved cash generation abilities, positioning the company for potential future stabilization and growth.

Income Statement

Positive

Johnson Matthey has experienced a decline in revenue over recent years, with a revenue decrease of 14% in the most recent annual period. The gross profit margin is at 7.0%, indicating moderate efficiency in production. The net profit margin has dropped to 0.8%, reflecting challenges in maintaining profitability. The EBIT margin stands at 1.9%, while the EBITDA margin is 3.8%, both suggestive of tight operational margins.

Balance Sheet

Positive

The company's debt-to-equity ratio is manageable at 0.63, indicating a balanced approach to leverage. The return on equity is low at 4.5%, suggesting limited efficiency in generating profits from shareholders' equity. The equity ratio is 37.6%, which reflects a solid capital base and reasonable financial stability.

Cash Flow

Positive

Johnson Matthey shows strong cash flow management with significant improvement in free cash flow from negative to positive $224 million. The operating cash flow to net income ratio is robust at 5.48, indicating effective conversion of revenue into cash. The free cash flow to net income ratio has improved, reflecting enhanced liquidity and financial flexibility.

Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
12.84B	14.93B	16.02B	15.44B	14.58B
	Gross Profit
898.00M	989.00M	1.05B	944.00M	981.00M
	EBIT
249.00M	505.00M	503.00M	488.00M	526.00M
	EBITDA
488.00M	621.00M	467.00M	564.00M	673.00M
	Net Income Common Stockholders
108.00M	276.00M	-101.00M	205.00M	255.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
542.00M	697.00M	418.00M	625.00M	332.00M
	Total Assets
6.34B	7.03B	6.67B	7.74B	7.36B
	Total Debt
1.49B	1.67B	1.25B	1.38B	1.43B
	Net Debt
948.00M	1.02B	860.00M	795.00M	1.13B
	Total Liabilities
3.96B	4.49B	4.22B	5.06B	4.54B
	Stockholders Equity
2.38B	2.54B	2.44B	2.69B	2.82B
Cash Flow		Free Cash Flow
224.00M	-91.00M	73.00M	295.00M	57.00M
	Operating Cash Flow
592.00M	225.00M	526.00M	676.00M	500.00M
	Investing Cash Flow
-255.00M	-129.00M	-292.00M	-357.00M	-435.00M
	Financing Cash Flow
-439.00M	191.00M	-439.00M	-43.00M	-168.00M

Johnson Matthey Technical Analysis

Technical Analysis Sentiment

Negative

Last Price31.30

Price Trends

50DMA

35.62

Negative

100DMA

35.05

Negative

200DMA

37.65

Negative

Market Momentum

MACD

-0.49

Positive

RSI

37.92

Neutral

STOCH

7.96

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JMPLY, the sentiment is Negative. The current price of 31.3 is below the 20-day moving average (MA) of 34.04, below the 50-day MA of 35.62, and below the 200-day MA of 37.65, indicating a bearish trend. The MACD of -0.49 indicates Positive momentum. The RSI at 37.92 is Neutral, neither overbought nor oversold. The STOCH value of 7.96 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JMPLY.

Johnson Matthey Peers Comparison

Overall Rating

UnderperformOutperform

Sector (47)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SXT	73 Outperform	$3.11B	24.92	11.79%	2.24%	6.92%	33.08%
JMPLY	70 Outperform	$2.59B	4.11	21.76%	6.25%	-12.54%	215.95%
IOSP	65 Neutral	$2.26B	63.42	3.02%	1.72%	-5.31%	-74.42%
FUL	61 Neutral	$2.91B	27.09	6.35%	1.65%	0.99%	-27.62%
OLN	58 Neutral	$2.26B	21.61	5.10%	4.07%	-4.29%	-74.85%
ASH	57 Neutral	$2.44B	21.03	0.18%	3.13%	-4.35%	-115.63%
Sector *	47 Neutral	$2.43B	-3.11	-22.65%	3.59%	4.02%	-28.96%

* Basic Materials Sector Average

Performance Comparison

JMPLY

Johnson Matthey

32.52

-9.54

-22.68%

ASH

Ashland

50.51

-42.80

-45.87%

FUL

H.B. Fuller Company

53.73

-21.29

-28.38%

IOSP

Innospec

87.47

-33.67

-27.79%

OLN

Olin

20.43

-32.86

-61.66%

SXT

Sensient Technologies

74.11

7.28

10.89%

Johnson Matthey Earnings Call Summary

Earnings Call Date: Nov 27, 2024 | % Change Since: -15.68% | Next Earnings Date: May 22, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture with notable strengths in Catalyst Technologies and cost savings, but challenges in Clean Air and PGM Services segments. The strategic focus on transformation and sustainable technologies offers a positive outlook, though current market conditions pose challenges.

Highlights

Resilient First Half Performance

Sales decreased 3% and underlying operating profit 4%, in line with expectations. Free cash flow was GBP347 million, driven by divestments.

Strong Catalyst Technologies Growth

Sales grew 20% to GBP336 million, with operating profit increasing 43% to GBP50 million. The segment benefited from licensing sales more than doubling.

Cost Savings and Transformation Benefits

GBP35 million cost savings in the first half, with a total of GBP155 million to date. On track to deliver GBP200 million by year-end.

Share Buyback Program

Initiated GBP250 million share buyback, with half completed by September 2024.

Strategic Progress in Sustainable Technologies

13 sustainable technology projects, including significant projects in sustainable aviation fuel.

Lowlights

Clean Air Segment Challenges

Sales down 7% to GBP1.2 billion, impacted by weak end markets and platform losses.

Decline in Platinum Group Metals Services

Sales decreased 9% to GBP207 million, with operating profit down 35% due to lower refining volumes and trading gains.

Hydrogen Technologies Underperformance

Sales declined to GBP20 million, with an operating loss of GBP26 million due to market slowdown.

Net Debt and Operating Cash Flow Concerns

Net debt at GBP783 million, with weaker operating cash flow in the first half.

Company Guidance

During the call, Johnson Matthey provided detailed guidance for Fiscal Year 2025, emphasizing their strong confidence in achieving a robust second half performance. The company maintained its full-year guidance, projecting at least mid-single-digit growth in operating performance. They reported a 3% decline in sales to £1.7 billion and a 4% decrease in underlying operating profit, but highlighted a resilient first-half performance with a free cash flow of £347 million and net debt reduced to £783 million. The company is progressing with their transformation program, expecting £200 million in savings by year-end. By March, a £250 million share buyback will be completed. Clean Air sales dropped 7% to £1.2 billion, while PGM Services sales fell 9% to £207 million. Catalyst Technologies grew 20% to £336 million, and Hydrogen Technologies saw a decline with a £26 million loss. The company expects strong second-half results for Platinum Group Metals and a reduced loss in Hydrogen Technologies, with ongoing capital discipline and strategic progress supporting their outlook.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.