 Shore: CMC needs to communicate its strategy
CMC Markets (CMCX) has established impressive business relationships, but Shore Capital says the market won’t get behind the share-dealing and spread-betting company until it communicates a monetisation strategy.
Analyst Vivek Raja retained his ‘hold’ recommendation but cut his ‘fair value’ target price to 280p after half-year figures on Friday. The shares rose 3.4% to 273p, recovering some of their decline on results today. This year the shares have soared 158%.
‘CMC has proved its technological competence amply, having secured impressive business-to-business relationships over the years with the likes of ANZ Bank, and more recently Revolut and ASB Bank,’ he said.
However, he said the issue has been about how the company ‘communicates monetising these relationships in a way public markets can sustainably get behind’.
This has created significant share price volatility and ‘sharp earnings upgrade and downgrade cycles in the past two years’.
‘Furthermore, in our view, limited disclosure pertaining to the core trading division reduces forecast confidence. Until these situations improve, we are unlikely to be able to recommend CMC’s shares,’ said Raja. |
Added too. Crazy not to at these levels. |
Added this morn |
Think this drop in share price will be reversed very quickly. |
Yeh, they've written off 2.5 million investment, not significant at all |
This article - I dont see why this matters.
hxxps://www.financemagnates.com/forex/brokers/cmc-markets-wrote-off-28m-investment-in-blockchain-firm-strike-x/ |
Any thoughts on this(?) |
Reason for weakness?
At CMC Markets, we are proud to partner with StrikeX, a dynamic and innovative leader in blockchain technology. We believe strongly in their vision and the transformative potential of their solutions, including advancements in self-custody, tokenisation, and blockchain infrastructure through StrikeX Labs.
We would like to address a recent news article which misrepresents our commitment to StrikeX and its strategic objectives. The write-off of our initial investment is purely an accounting decision and does not reflect our belief in StrikeX's technology or potential, nor does it indicate any change in our partnership.
On the contrary, we continue to integrate StrikeX's services into our offerings and see our relationship deepening further as we collaborate on Web 3.0 developments. The team at StrikeX has made tremendous strides in this fast-paced industry, and we remain excited to grow alongside them, supporting their mission to reshape the future of finance.
CMC Markets is committed to fostering innovation and partnerships that deliver long-term value, and StrikeX remains a key part of that vision. |
Crazy, this will get moved to US listing as UK is not rewarding its success and prospects |
Market makers playing games shaking people out |
‘Bonkers reactions’ lead to brilliant opportunities , same with PAY yesterday, watching carefully. |
Looking at the chart, 254 could be the next support |
lots of stale bulls who have been stuck in this range-bound trade for the last six months crawling out.
I think that they are making a mistake as the results were good.
However, the market expected slightly more from CMC given the previous update.
Very technical fall that could yet fall further |
Totally bonkers reaction to an in line interim result. It’s starting to become almost impossible to hold shares medium to long term in any company on UK exchanges. 20% profit gone in the blink of an eye from what I thought a very good H1. |
Market no likey |
Seems to have stabilised at around 295p |
Expectation o ver hyped perhaps |
Bought a few, agree this looks overdone |
looks overdone |
With good results and a huge increase in the dividend, why has the share price dropped so much |
Looks like the difference is the write down of Strike X. So not main business. |
Against approx. £51 mill. at last trading statement, likely not! |
Are those numbers a beat? I think they are. |
They look to have done about 60% FY EPS estimate in the first half? (they only reference the consensus for net operating income in the update) |
"As we announced in the previous financial year, CMC has reached the peak of the investment cycle and whilst we continue to invest in the business, we are taking a disciplined approach, and we remain laser focused on driving further efficiencies across our global operations as we continue to leverage our scale and technology. We remain confident in meeting the guidance set earlier this year, with net operating income expected to be in line with market consensus, supported by a strong pipeline of B2B partnerships and ongoing product expansion and diversification." |
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