Jefferies downgrades CMC Markets to 'hold'

Jefferies has downgraded CMC Markets, after the online trading platform warned of a more challenging environment.

The broker cut its rating to ‘hold’ from ‘buy’ and reduced its price target to 190p from 275p.

In a note published on Thursday, it said: "Market volatility would normally be expected to favour CFD trading volumes, and CMC Markets’ closest peers have recently said that they expect to meet consensus forecasts for their next financial years.

"With CMC Invest UK still too young to make a meaningful contribution and stockbroking income coming down from pandemic highs, we cut our forecasts in line with the profit warning."

CMC said on Monday that net operating income for the 2023 full year would likely be more or less flat, with lower equity volumes and a higher proportion of lower margin institutional trading activity.

Shares in CMC, which fell sharply following the profit warning, were largely flat as at 0930 BST, at 176.21p.