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Investing.com - JPMorgan has upgraded Macquarie Group Ltd. (ASX:MQG) (OTC:MQBKY) from Neutral to Overweight and raised its price target to AUD241.00 from AUD207.00. The financial services giant, currently valued at $53.62 billion, appears slightly undervalued according to InvestingPro Fair Value analysis.
The upgrade comes as Macquarie’s share price has remained flat since its November 2024 half-year results, while the ASX 200 has risen 10% and the ASX 200 Banks index has rallied 17% during the same period. InvestingPro data shows the stock has delivered a 9.16% return year-to-date, trading at a P/E ratio of 23.2x with revenue growth of 2.36% over the last twelve months.
JPMorgan cited improved visibility on the U.S. interest rate path as a key factor, with market pricing suggesting two Federal Reserve rate cuts before the end of 2025 and five cuts by the end of 2026.
While these rate changes aren’t expected to significantly impact Macquarie’s FY26 earnings, JPMorgan sees an improved outlook for FY27 and FY28, with potential for performance fee surprises to offset subdued commodities trading income.
The firm has increased its earnings per share forecasts by 2-4% for FY27/28, now expecting approximately 10% three-year EPS compound annual growth rate, and noted that Macquarie’s current valuation discount to major banks appears unjustified.
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