Over at RBC Capital Markets, analysts dropped their target price on financial services firm CMC Markets from 350.0p to 310.0p on Tuesday following the group’s recent trading update.
RBC Capital said its 31% cut to earnings per share estimates reflected guidance within CMC’s unscheduled trading update, which actually reiterated expectations of 30% growth from the 2022 level to 2025.
However, in light of the fact that growth for 2023 now looks set to be “more subdued”, RBC also slightly reduced its NOI forecasts for 2024 and 2025 by 4% and 2%, respectively, leading to earnings per share reductions of 15% and 8%.
“In light of the more subdued income growth now expected in FY23 we also slightly reduce our FY24 and FY25 estimates, with outer year reductions driving a reduction in our price target,” said RBC.
“Following an adverse reaction to the news in late trading on Monday, CMCX is trading on 8.9x FY24E P/E, based on our new estimates. This compares to a 5yr historical average of 11.9x. CMCX will next update the market with FY23 results on Tues, 13th June.”
Reporting by Iain Gilbert at Sharecast.com
