LONDON (ShareCast) - (Sharecast News) - Berenberg downgraded its stance on shares of online trading platform Plus500 to 'hold' from 'buy' on Friday and slashed the price target to 770p from 1,800p after it posted a big drop in first-quarter revenues amid "extremely subdued" financial markets.
Plus500 said earlier that revenue slumped 65% in the three months to the end of March 2019 from the fourth quarter of 2018 to $53.9m, while the number of active customers edged down 4% to 97,921 and average revenue per user fell 64% to $550.

On the bright side, however, the number of new customers rose 10% from the previous quarter to 21,306.

Berenberg said it was downgrading the shares given the lack of visibility of revenues and signs that regulators will continue to target the sector. The bank added that it was waiting for further clarity on what sustainable performance looks like.

"Lower volatility and rising markets made trading conditions difficult, as was reported by peers IG and CMC Markets. Unfortunately, while conditions could improve and extrapolating from a single quarter is dangerous, visibility is low and market losses are large," it said.

"It is also difficult to separate the impact of markets and the regulatory restrictions on retail client trading."

At 1500 BST, the shares were down 29% at 513p.

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