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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