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Highlights
- Online financial services trading platform CMC Markets lowered its FY 2022 profit guidance by up to £80 million due to reduced trading activity.
- It forecasted its FY 2022 net operating income to be between £250 million and £280 million, down from its previous forecast of £330 million.
- CMC’s shares fell by 28 per cent following the news, almost touching its 52-week low.
UK based online trading platform CMC Markets PLC (LON: CMCX) cut its FY 2022 profit guidance by up to £80 million in its latest trading update for the five months ending on 31 August. The lowered guidance was due to moderating trading activity following record profits. In the previous year, it had posted record profit £401 million.
The stock plunged by almost 28 per cent in today’s trading session, following the news. It is also near to touching its 52-week low of GBX 295.50.
CMC Markets (LON: CMCX) share price performance
CMC Market’s shares were trading at GBX 304.00, down by 27.62 per cent on 2 September 2021 at 13:46 PM GMT+1. Meanwhile, the FTSE 250 index, which it is a part of, was trading at 24,205.10, down by 0.19 per cent.
(Image Source: Refinitiv)
CMC became the highest faller on the FTSE 250 index following the trading update.
The company’s market cap stands at £1,223.95 million as of 2 September.
CMC Market’s latest trading update
CMC lowered its FY 2022 net operating income guidance between £250 million and £280 million as the trading boom caused by extreme levels of market volatility was nearing an end, causing subdued trading activity.
CMC noted that the lower trading activity was visible across new and existing clients and also across its non-leveraged and leveraged businesses.
CMC had previously forecasted in its Q1 2022 trading update that its net operating income in FY 2022 would be over £330 million
Bottom Line
Despite the muted trading activity and sharply lowered profit guidance, the overall sector still has a positive outlook as more and more investors seek to trade online. Furthermore, the company has stated its overall long-term growth outlook remains optimistic due to several strategic measures, such as the development of a new non-leveraged investment platform amongst other initiatives.
The stock is currently heading towards crossing its one year low, it can be said more attractively priced for investors seeking undervalued stocks, and they can enter once the stock prices stabilise near the lows.
