CMC Markets was back in the headlines this morning as the group posted its final trading update ahead of the publication of its 6-month results, on the 17th of November. The CMC Markets falls -2.11 % as it reiterates its full-year guidance. Read our full CMC Markets review here.
This was the third piece of CMC Markets share price news and trading update from the forex platform (whose share price stands at 271.16p this morning) since the 29th of July.
In the last one, which was published just over a month ago, the group warned on trading and profitability, saying that it now expected FY 2022 net operating income to settle in a range between £250-280 million.
The group reiterated that view in this morning’s release, adding that it expected net operating income from the first half of the year to come in at £126.0 million.
And that net trading revenues, from leveraged products, for the first 6 months of the year were likely to come in at £100.0 million. Exactly half of the £200.0 million figure seen in the first half of the last financial year.
CMC Markets also noted a drop in the number of active clients compared to the first half of the financial year 2021, though it also pointed to an improvement in client trading activity and volumes, during September this year.
CMC Markets shares stand at 271.16p, down -2.11% on the day, indicating that the market had already priced in the bad news.
The -41.48% fall in the CMC Markets stock price, over the last three months, confirms that theory.
From a technical standpoint, the share price is moving sideways or consolidating, after the early September sell-off. That saw the price gap down to 360p, from 420p, and then trade as low as 295p.
Standing more than 20p below that level this morning, the stock will need to overcome near term resistance at 290p if it is to make any upside headway and break out of its recent range.
The 20-period moving average at 275p could potentially offer support to the price as could the modest uptick in the stocks RSI 14 reading which has moved back above the oversold boundary of 30.0 to stand at 32.0.
Fundamentally the stock looks cheap in comparison to listed peers IG Group and Plus 500.
And with a market cap of just £801.0 million and a PE ratio of 4.50 times, CMC Markets might be thought vulnerable to takeover approaches.
However, there is now a question mark over its future growth prospects. The 11% dividend yield the stock currently offers probably can’t be considered secure either, though it may be enough to attract some adventurous income investors.
The company’s stockbroker Peel Hunt wrote on CMC Markets last week, pushing the fintech credentials of the stock, with a share price forecast of 462p.
Though it also expressed the belief that over an unspecified time frame, the stock price could reach 730p or more to value the business at £2.0 billion.
Shore Capital is the latest broker to comment on the company, writing today, they reiterated their 440p price target and rate the stock a buy. Though they note that CMC Markets marketing spend is likely to increase in the second half of this financial year.
The consensus forecast for the CMC Markets share price, among analysts that cover the stock is 436.50p, and all of them currently rate the stock as a buy.
Darren is a veteran of the financial markets with almost 36 years of experience under his belt. He has worked in trading, sales, analytical, and research roles, he has been a regular guest & commentator on financial television channels and publications. During his career, Darren has been fortunate to act for and advise major hedge funds and investment banks as well as HNWI. Darren analyses the markets using a blend of technical and fundamental analysis