HMC Capital shares (ASX:HMC) experienced a dramatic sell-off today, down 17.25% as markets reacted to a stream of negative news. The steep decline reflects significant concerns surrounding the company’s leadership, earnings outlook, and strategic direction, particularly within its burgeoning energy transition portfolio.

The immediate trigger for the market’s negative response appears to be the unexpected resignation of HMC’s Head of Energy Transition. This key executive was instrumental in shaping the company’s strategy and investments in the renewable energy sector, a vital component of HMC’s diversified alternative asset management approach, which also includes real estate, private equity, and digital infrastructure.

The sudden departure has ignited fears about the stability and future direction of these critical projects. With no immediate successor announced, investors are left questioning the continuity of HMC’s strategic vision and its ability to execute on its ambitious energy transition plans.

Adding fuel to the fire, HMC Capital recently revised its fiscal year 2025 operating earnings per share (EPS) forecast downwards. The company now anticipates an EPS of A$0.66, a reduction from the previously projected A$0.70. This adjustment primarily stems from fair value changes in holdings within its HMCCP Fund I, impacted by market fluctuations in April.

While HMC has maintained its dividend guidance of 12 cents per share, the earnings downgrade signals potential headwinds and raises concerns about the overall performance of its investment portfolio. The reduced EPS forecast suggests that the company is facing challenges in generating expected returns, further dampening investor sentiment.

 

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The negative news flow has not gone unnoticed by analysts. Morgan Stanley has significantly reduced its price target for HMC Capital, slashing it from A$12.21 to A$7.35. This drastic revision reflects more conservative assumptions about the growth of HMC’s assets under management (AUM). The firm has also lowered its fiscal year 2025 EPS estimate by 12%, aligning with HMC’s revised guidance.

Looking back at HMC’s recent performance, the stock has already been underperforming both its sector and the broader ASX 200. Since the start of 2025, HMC’s share price has lost 57.55%, with the ASX200 adding 4.1% over the same period. The company’s next major scheduled announcement is the preliminary and annual report on 20 August 2025, which will be closely scrutinized for clarity on the company’s financial performance and future outlook.

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