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CMC Markets plc (LON:CMCX) Analysts Are Reducing Their Forecasts For This Year
The analysts covering CMC Markets plc (LON:CMCX) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.
Following the latest downgrade, the four analysts covering CMC Markets provided consensus estimates of UK£267m revenue in 2024, which would reflect a discernible 6.8% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to tumble 60% to UK£0.06 in the same period. Before this latest update, the analysts had been forecasting revenues of UK£338m and earnings per share (EPS) of UK£0.15 in 2024. Indeed, we can see that the analysts are a lot more bearish about CMC Markets' prospects, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.
See our latest analysis for CMC Markets
The consensus price target fell 21% to UK£1.52, with the weaker earnings outlook clearly leading analyst valuation estimates.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 6.8% by the end of 2024. This indicates a significant reduction from annual growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 0.2% annually for the foreseeable future. It's pretty clear that CMC Markets' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for CMC Markets. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.
As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with CMC Markets' financials, such as its declining profit margins. For more information, you can click here to discover this and the 2 other concerns we've identified.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
About LSE:CMCX
CMC Markets
Provides online retail financial services to retail, professional, stockbroking, and institutional clients in the United Kingdom, Ireland, rest of Europe, Australia, Germany, New Zealand, Singapore, Canada, and Sweden.
Undervalued with solid track record.