Equity Analysis /

AU : Macquarie Group - A stellar FY22 result, but will be hard to cycle

    Richard Coles
    Richard Coles

    Financials - Equity Research

    8 May 2022
    Published by

    MQG’s FY22 NPAT (A$4.7bn) was +56% on the pcp and 7% above Bloomberg consensus (A$4.38bn). In our view, it was hard to fault MQG’s FY22 result, which benefitted from strong performances in CGM and Macquarie Capital. The only real negative, in our view, is it will be difficult for MQG to cycle such a standout performance in FY23. We lift MQG FY23F/FY24F EPS by 4%-6% reflecting more favourable earnings assumptions across key businesses. Our price target rises to ~A$215 (from A$209). With >10% upside to our price target, we move MQG to an ADD recommendation. We anticipate some near-term earnings volatility over FY23 but we like MQG’s favourable longer-term growth profile and consistent history of delivering strong returns (~15% average ROE over time).