Last Update 18 Jun 26

MQG: Mixed Broker Views And Capital Moves Will Shape Future Repricing

Analysts have trimmed their Macquarie Group price target to A$250.14. This reflects slightly lower assumed discount rates and a marginally reduced future P/E multiple in updated models.

Analyst Commentary

Recent research on Macquarie Group highlights a mix of optimism and caution, with differing views on how the current valuation lines up against execution risks and future growth opportunities.

Bullish Takeaways

Bullish analysts see the updated A$250.14 price target as consistent with Macquarie Group’s ability to execute on its business model, even with slightly more conservative assumptions on discount rates and P/E.
The recent upgrade flagged in Street research suggests some analysts view current pricing as reasonable for long term holders looking at Macquarie Group’s earnings power rather than short term trading moves.
Supportive commentary points to the stock’s potential to justify a premium P/E multiple if Macquarie Group continues to deliver on cost discipline and capital allocation.
Bullish views generally frame recent model tweaks as fine tuning rather than a change in the overall thesis on Macquarie Group.

Bearish Takeaways

Bearish analysts, including Goldman Sachs in its downgrade, focus on the risk that Macquarie Group may already be pricing in optimistic execution, which could limit upside if earnings progress is slower than expected.
The slightly lower assumed discount rates and reduced future P/E multiple signal that some models are building in more caution around risk and sustainable earnings quality.
More cautious views highlight the possibility that any missteps in capital deployment or weaker fee and market related income could challenge the justification for Macquarie Group’s current valuation.
Some bearish analysts frame the recent changes as a recalibration that brings expectations closer to the middle of the range, rather than positioning Macquarie Group as clearly undervalued.

What's in the News for Macquarie Group

Macquarie Group reported a record full year FY26 profit of A$4.85b, with a 30% uplift in earnings supported by broad based contributions across investment banking, asset management and infrastructure businesses. Source: "Is the market underestimating Macquarie Group (ASX:MQG)?"
The company highlighted exposure to energy transition projects and commodity market volatility as key contributors to its FY26 result, alongside its diversified global business model. Source: "Is the market underestimating Macquarie Group (ASX:MQG)?"
Macquarie Group issued US$1.25b of subordinated notes classified as Tier 2 capital, maturing in 2037. The stock moved down with the broader ASX 200 during a session affected by geopolitical tensions and rising oil prices. Source: "Macquarie Group Down as ASX 200 Drops; $1.25 Billion Note Deal Watched"
For the six months ended 31 March 2026, Macquarie Group declared an ordinary dividend of A$4.20 per share, with an ex date of 18 May 2026, record date of 19 May 2026 and payment date of 2 July 2026.
Macquarie Group is among potential bidders in early stage M&A discussions for Re Sustainability Limited and IntelliSmart Infrastructure in India, according to media reports citing multiple unnamed sources.

Valuation Changes for Macquarie Group

Fair Value: A$250.14 is unchanged, indicating no adjustment to the modelled intrinsic value per share.
Discount Rate: fallen slightly from 9.08% to 9.05%, reflecting a modestly lower required return in the updated assumptions.
Revenue Growth: held steady at 2.85% in the refreshed model, suggesting no change to top line growth expectations for Macquarie Group.
Net Profit Margin: effectively unchanged at 26.07%, with the update reflecting only a rounding level adjustment.
Future P/E: fallen slightly from 21.48x to 21.46x, pointing to a marginally more conservative earnings multiple in the valuation work.

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Key Takeaways

Strategic investments in asset management and digitization are expected to drive revenue growth and enhance operational efficiencies.
Expanding in Asia and focusing on green projects might boost revenue, despite current competitive and volatile market conditions.
Margin pressures, foreign exchange impacts, and new investments may hinder Macquarie Group's revenue, profitability, and financial predictability across various segments.

Catalysts

About Macquarie Group

Provides diversified financial services in Australia, the Americas, Europe, the Middle East, Africa, and the Asia Pacific.What are the underlying business or industry changes driving this perspective?

Macquarie Group is investing heavily in its asset management business, focusing on performance fees and fundraising, which should contribute to revenue growth and improve earnings as the market conditions align with these strategic moves.
The continued investment in digitization within the Banking and Financial Services division is expected to drive operational efficiencies, potentially benefiting net margins over time by reducing costs and enhancing scalability.
Macquarie Capital's growing private credit portfolio, alongside increasing activity in M&A and asset realization, could positively impact earnings and revenue growth as markets recover, providing more opportunities for capital deployment.
The strategic emphasis on global growth in Commodities and Global Markets, particularly in Asia, promises to expand client numbers and potentially boost revenue, despite currently subdued trading conditions due to competition and market volatility.
The business is positioned to benefit from potential performance fees and asset realization gains in key investment areas like data centers and green energy projects, potentially impacting earnings growth and improving return on equity as these assets mature.

Macquarie Group Earnings and Revenue Growth

Macquarie Group Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Macquarie Group's revenue will grow by 2.8% annually over the next 3 years.
Analysts assume that profit margins will increase from 23.9% today to 26.1% in 3 years time.
Analysts expect earnings to reach A$5.6 billion (and earnings per share of A$14.82) by about June 2029, up from A$4.7 billion today. However, there is some disagreement amongst the analysts with the more bullish ones expecting earnings as high as A$6.4 billion.
In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 21.5x on those 2029 earnings, up from 19.7x today. This future PE is greater than the current PE for the AU Capital Markets industry at 19.1x.
Analysts expect the number of shares outstanding to grow by 0.16% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 9.05%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

Macquarie Group's assets under management decreased by 2% due to unfavorable foreign exchange movements and outflows in equity strategies, potentially impacting future revenue growth.
Competitive dynamics in the Banking and Financial Services segment are creating margin pressure, likely affecting net margins as the market continues to drive these pressures.
Commodities and Global Markets experienced lower client activity due to a benign market environment, resulting in decreased demand. This reduced activity can negatively impact revenue and earnings in this sector.
The Macquarie Capital segment saw a decline in net profitability due to new investments, which can drag on near-term earnings and potentially affect return on equity until those investments mature.
Performance fees in Macquarie Asset Management are subject to market conditions, with potential lumpy income recognition impacting revenue streams and financial predictability over time.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of A$250.14 for Macquarie Group based on their expectations of its future earnings growth, profit margins and other risk factors.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of A$271.0, and the most bearish reporting a price target of just A$205.0.
In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be A$21.3 billion, earnings will come to A$5.6 billion, and it would be trading on a PE ratio of 21.5x, assuming you use a discount rate of 9.0%.
Given the current share price of A$252.78, the analyst price target of A$250.14 is 1.1% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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