Market report: Johnson Matthey charges up after £200m electric car breakthrough

Will the wheels come off for Johnson Matthey once roads are packed with electric cars?

Investors were feeling far more confident about the catalytic converter maker’s future after yesterday’s capital markets day, as analysts urged them to pile in.

As well as revealing a £200 million investment in battery technology, Liberum said Johnson Matthey shocked guests with its claim of a breakthrough in enhanced lithium nickel oxide, the material used in electric vehicles.

“It would be remarkable and impressive if JM has pulled off a game-changing breakthrough so quickly,” analyst Adam Collins said.

Many have predicted Johnson Matthey, which makes most of its sales from exhaust catalysts, will suffer as drivers switch to electric cars.

Credit Suisse analysts were also impressed by the electric vehicle ambitions, topping up their target price by 200p to 3700p.

Even after yesterday’s rally, there was no sign of profit taking as the shares climbed a further 90p, or 2.7%, to 3480p.

Markets were on edge amid concerns about North Korea’s plans to detonate a hydrogen bomb as equities around the world drifted lower.

The FTSE 100 only suffered a minor fall though, down 2.51 points at 7261.39 as investors awaited Theresa May’s speech in Florence where she was expected to put forward the Government’s latest Brexit proposals.

Coca-Cola HBC, the soft drinks bottler, joined Johnson Matthey higher on the blue-chip index after an upgrade from Morgan Stanley.

The investment bank raised its rating from Underweight to Equal-Weight, encouraged by “good progress” towards its ambitious margin targets for 2020.

“Whilst we continue to believe the soft drinks industry faces structural challenges, we note that improving macro and a healthier consumer outlook across CCH markets should support a sustainable improvement in topline growth,” Morgan Stanley said.Shares rose 33p, to 2536p.

Engineer Smiths Group fell 75.78p, or 4.7%, to 1529.67p after its annual results showed its largest businesses, oil and gas arm John Crane and Smiths Medical, were under pressure.

Investors were concerned by comments that the performance for 2018 will be weighted towards the second half of the year.

Investors were encouraged by Pets at Home’s capital markets day yesterday. The pet supplies retailer, whose shares have come under pressure this year, was up 11.4p to 206p today.

Oil rig maker Lamprell plunged 9.5p to 89.75p after warning on revenues.

The company, which famously issued five profit warnings in 2012, said annual revenues would be between $370 million and $390 million, below previous guidance, which it blamed on “market conditions”.