Peel Hunt FY earnings to miss market views, shares slump

Peel Hunt shares tumbled on Wednesday after the broker said full-year earnings will be below market expectations.

The company now expects full-year revenue to be "marginally below" the bottom of the previously guided range, while earnings will be "commensurately lower" than current market expectations. Peel Hunt put this down to delays to the investment banking pipeline and the performance of its execution & trading division in the fourth quarter.

It said that since the start of the calendar year, concerns related to inflation and interest rates, along with global geopolitical events, have dented market conditions and investor sentiment.

"As a result, the backdrop for capital markets activity has been particularly challenging," it said. "We continue to have a strong pipeline of corporate transactions, but have seen a number of deals delayed. Our investment banking division continues to win high quality corporate clients, with the total number growing to 163, and is expected to post record full-year revenues."

Peel Hunt said that while there has been a slowdown in execution & trading activity, full-year revenues in that division continue to compare "favourably" with pre-pandemic levels. The research & distribution business continues to win market share and has performed in line with expectations, it added.

At 0930 GMT, the shares were down 16.5% at 148.15p.