LONDON (ShareCast) - Credit Suisse (NYSEArca: CSMA - news) has retained its 'neutral' rating for speciality chemicals group Johnson Matthey (EUREX: JMAF.EX - news) , saying that while the outlook is negative, it is already priced in.
The broker highlighted that Johnson Matthey has traded more or less flat over the summer, down just 0.4% over the last three months, underperforming chemicals peer Umicore (EUREX: NVJF.EX - news) (up 4%) and the sector average (up 2%). Meanwhile, the current valuation is line with Umicore but at a 24% premium to the sector.
Credit Suisse said: "We believe today's share price could represent an attractive entry point for long-term investors, who are not risk averse. However we see macro weakness holding back performance over the next year."
The broker lists three "major" short-term negatives surrounding the business: low platinum group metals prices and supply disruptions in South Africa; a subdued European auto production outlook; and a weakening heavy duty diesels (HDD) outlook.
Nevertheless, Credit Suisse says that these issues are already widely known and probably already reflected in the price.
The broker has pared its target price slightly for the shares, from 2,304.76p to 2,300p.
The stock was down 0.65% at 2,277p in mid-morning trade on Wednesday.