HMC Capital (ASX:HMC) shares tumbled today, hitting a new multi year low at A$3.13, after the company released its FY25 earnings report accompanied by a weaker-than-expected outlook for FY26. The market reacted negatively to the subdued guidance, overshadowing otherwise robust growth figures.
The share price closed at A$3.27, a 6.57% drop from the previous day’s close. The stock touched a low of A$3.13 during intraday trading, reflecting market concerns regarding the company’s future profitability.
Looking at earnings, the company actually reported a 47% surge in assets under management (AUM), reaching $18.7 billion. Statutory profit after tax more than doubled to $265.2 million for the year. Pre-tax operating earnings also saw a significant boost, rising 74% to $224.6 million, allowing for the company to declare a dividend of 12 cents per share.
More mixed however was an EPS of 56cents, which whilst representing a jump of 51%, failed to beat expectations.
The market reaction stems from forward guidance for FY26, which so often dictates the near term direction more than the backwards looking results. Markets are forward looking, so it is no surprise to see the share price pull back on a declining outlook.
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HMC Capital expects to achieve “at least” 40 cents EPS, a target nearly 30% lower than the 56 cents recorded in FY25. This projected decline has dampened market enthusiasm despite the strong FY25 results.
While the market has punished HMC Capital for its conservative FY26 guidance, the company is guiding for “at least” 40 cents EPS, suggesting that the actual figure could be higher. It is possible management are being conservative in their outlook, even if they are taking near term pain for it today. The share price had already fallen ~65% YTD leading into today’s decline, and there remains plenty of work to do if the company is to move sentiment bullish anytime soon.
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