CMC Markets PLC (LSE:CMCX) is enjoying a better today, up around 2%, although it is still 56% lower year-to-date.
Last month, the online trading and platform technology group said trading and investing net revenues trended 20% lower year-on-year with “markedly lower monetisation of client trading activity due to a higher proportion of lower margin institutional volume”.
RBC Capital Markets said: The drop-off in volatility seen year-to-date has been untimely for CMC as it has coincided with a period of elevated cost owing to investment in strategic initiatives.
But the broker sees valuation support from the high proportion of market cap now covered by surplus own-funds.
RBC has cut net operating income forecasts by 18% on average following the trading update and lowered its price target to 140p from 250p.
This offers upside from the current share price of 102.40p and RBC has reiterated an 'outperform', speculative risk rating.