Funding Circle Holdings PLC

Funding Circle Holdings PLC (LON: FCH) is an FTSE All-Share index listed lending platform for small business borrowers. It provides around £14.5 billion in loans to nearly 130,000 businesses.

As per our previous recommendation on FCH as on 12 October 2022, a ‘Speculative Buy’ rating on the stock at GBX 43.00 was given, and noted below are the details of support/ resistance provided in our previous report:

Investment Rationale – SELL at GBX 49.62

• Profit Booking: FCH’s stock price is hovering close to the previously recommended resistance 2 level, and it is presenting a profit booking opportunity.
• Financial Decline: In H1 FY22, FCH reported a decline in operating income and net income. Downfall was mainly due to the high levels of income from the government-guaranteed loan schemes in H1 FY21.
• Technical Standpoint: FCH’s stock price has breached the upper Bollinger Band, reflecting an overbought scenario.
• Macroeconomic Uncertainties: The market sentiments can remain weak in the short-term due to 40-year high inflation, geopolitical tensions, and political risks.

FCH’s Daily Chart

(Source: REFINITIV, Analysis by Kalkine Group)

Considering the resistance level achievement, current trading levels and risks associated, it is prudent to exit and book profit at the current levels. Hence, a 'Sell' rating has been given on the stock at the current price of GBX 49.62 (as of 19 October 2022, at 8:10 AM GMT+1). 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 19 October 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

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