Macquarie group (ASX: MQG) outlook
Hi MM, What do you make of the MQG first half results and where do you see MQG's share price in say 3 months time? Regards, Peter
The Latest Q&A
Answer
Hi Peter,
We felt Macquarie Group (ASX: MQG) delivered a strong headline result for 1H27, with net profit jumping 50% to $2.48bn, slightly ahead of consensus expectations of $2.45bn.
- The standout was Commodities & Global Markets (CGM), where profit surged 83% to $2.03bn, benefiting from elevated energy prices and strong US natural gas trading activity.
- Macquarie Asset Management also performed well, with earnings up +28%, while Banking & Financial Services delivered a steady 6% improvement.
However, the result was far from consistent across the group, with Macquarie Capital’s profit falling more than 60% to $278m. The interim dividend of $3.25 per share also disappointed, falling short of the $3.50 expected.
Despite the profit beat, MQG shares fell ~ 4%, albeit in a weak session for the ASX, as investors focused on the uneven divisional performance and a fresh regulatory setback:
- APRA revealed that Macquarie had incorrectly calculated capital requirements for its non-bank businesses dating back to 2019, imposing an additional $100m governance capital overlay on top of the existing $500m requirement, with further regulatory action possible.
The announcement overshadowed the strong commodities result and raised fresh questions around governance and capital management.
Looking ahead, the key issues are whether CGM can sustain its exceptional profitability, whether Macquarie Capital can deliver its second-half deal pipeline, and how incoming CEO Greg Ward addresses the regulatory concerns.
We thought it was a solid result, but the reliance on commodities earnings, weaker dividend and renewed APRA scrutiny explain the markets reaction.
MM would consider MQG, as an alternative banking exposure, below $240.
