Macquarie Group Ltd (ASX: MQG) has reported its December 2018 update to investors, is the Macquarie share price a buy?
Macquarie Group is Australia’s largest investment bank with operations spread throughout North America, Europe, Middle East, Asia and Australia. Unlike a traditional ‘retail’ bank, like most investment banks Macquarie makes a large chunk of its profit by operating in the investment markets and managing ‘assets’ for individuals and organisations. As of 2018, Macquarie had reported a profit for 49 years in a row.
Is The Macquarie Group Share Price A Buy?
The Macquarie share price is up nearly 3% after giving its operational briefing for the December 2018 quarter.
Macquarie said trading conditions were satisfactory with significant realisations across the business.
Its annuity-style businesses’ profit for the December 2018 quarter was slightly higher than the December 2017 quarter. However, the year to date profit from these businesses is down compared to last year due to lower performance fees in Macquarie’s asset management business, which was offset by transactions in Corporate and Asset Finance and continued growth in Banking and Financial Services.
The investment bank’s market-facing businesses also had a good quarter, with net profit “significantly up” on the corresponding quarter last year. The Commodities and Global Markets (CGM) segments seemingly had a good performance.
Macquarie informed investors that it had surplus capital of $4 billion and a CET1 ratio of 10.8% at the end of the quarter.
New Macquarie CEO Ms Wikramanayake said: “Macquarie remains well positioned to deliver superior performance in the medium term.”
Macquarie FY19 Outlook
Macquarie is now expecting profit growth of up to 15% in FY19 compared to FY18, although market conditions, foreign exchange rates and the completion rate of transactions could make this target unpredictable.
Is The Macquarie Share Price A Buy?
Macquarie is now nearly trading at an all-time high, so it’s not as good value as it has been in recent times. Since mid-December the share price has increased by nearly 20%.
I prefer Macquarie to the other big ASX banks like Westpac Banking Corp (ASX: WBC), however I don’t think now is the best time to Macquarie shares.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
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