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While Johnson Matthey Plc (LON:JMAT) might not have the largest market cap around , it saw significant share price movement during recent months on the LSE, rising to highs of UK£17.04 and falling to the lows of UK£14.70. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Johnson Matthey's current trading price of UK£15.31 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Johnson Matthey’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for Johnson Matthey
What Is Johnson Matthey Worth?
The stock seems fairly valued at the moment according to our valuation model. It’s trading around 8.1% below our intrinsic value, which means if you buy Johnson Matthey today, you’d be paying a fair price for it. And if you believe the company’s true value is £16.65, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Johnson Matthey’s share price may be more stable over time (relative to the market), as indicated by its low beta.
What kind of growth will Johnson Matthey generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Johnson Matthey's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? It seems like the market has already priced in JMAT’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on JMAT, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.