Johnson Matthey Results In Line but Capital Expenditure Guidance Higher Than Expected

Narrow-moat Johnson Matthey reported fiscal 2021 results that were in line with the Visible Alpha consensus, as expected, given the pre-release earlier in the quarter. However, shares are trading off around 4% intraday. We think this was due to somewhat disappointing fiscal 2022 guidance, including higher-than-expected capital expenditures. We don’t expect to make a material change to our forecast or GBX 3,400 fair value estimate. At current levels, the shares look slightly undervalued.