Macquarie Group (MQG)

HOLD

Macquarie AGM

28 Jul 2022

Sector: Financials

Need to know:

1Q23 Trading conditions favourable but a slowing flagged.
Commodities (40% of group earnings) and Banking (10.6% of group earnings) were the best performing areas driving slight growth.
Group warns of slower growth for FY23 vs FY22 which is largely factored into market expectations.

Investment implications

Macquarie group AGM came out this morning stating favourable trading conditions for 1Q23. However, a softening was flagged over the quarter which was largely in line with consensus expectations.

MQG’s 1Q23 annuity-style businesses (MAM and BFS) combined net profit was up on 1Q22 – Driven by BFS outperformance as MAM remained relatively inline.

MQG 1Q23 markets-facing business net profit slightly up on 1Q22 driven by the strong results across the commodity platform.

Overall, total groups financial position was in line with expectations. Our view remains that FY23 growth will be softened (market assuming -10%).

We maintain our Hold rating as we believe MQG is a structurally strong business that’s expected to be impacted by macroeconomic conditions.

Figure 1: MQG performed relatively in line with market since February 2022.

This commentary reflects our initial view. For detailed reports for companies under Sandstone Insights coverage, see our latest research notes for our investment view and specific risks associated with investing in these companies.

Stock overview

Share price

Company overview

Australia’s largest investment manager and investment bank with offshore income generating more than half of the group earnings.

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