JP Morgan has edged up its price target for catalysts specialist Johnson Matthey after last week's trading update and upgraded the stock to 'neutral' from 'underweight'.

'The key message from the 28 Jan investor event was the growth opportunity in China afforded by the company's technology offering, particularly in ECT [emission control technologies]. Tighter Chinese emissions legislation demands increasingly complex solutions (in both stationary and mobile catalysts), and this allows JMAT to continue to gain share from local competitors,' JP Morgan said.

The US bank has upped its earnings per share estimates for 2010 and 2011 by 7% and 5% respectively, and cranked up its target price from 1450p to 1500p, based on a discounted cash flow model.

'While risks remain over the timing/extent of a stabilisation in car production or recovery in truck markets, we believe JMAT will likely enjoy substantial growth later this year while many of its Chemicals peers will face toughening headwinds,' JP Morgan concluded.

Related share prices
Johnson Matthey (JMAT) share price