Westpac Banking Corp (ASX: WBC) isn't the only bank releasing its results this week.
On Friday all eyes will be on the Macquarie Group Ltd (ASX: MQG) share price when it releases its FY 2020 result.
Ahead of the release, I thought I would look to see what the market is expecting from the investment bank.
What does the market expect Macquarie to report?
According to a note out of Goldman Sachs, it expects Macquarie to turn in a report card which is much stronger than those we've seen from the big four banks recently.
It is forecasting cash earnings of $2,952 million in FY 2020, down 1% on the prior corresponding period. This is in line with its guidance for cash earnings to be "slightly down" on FY 2019. It is, however, a touch higher than the Bloomberg analyst consensus estimate of $2,939 million.
In addition to this, Goldman expects Macquarie to declare a final dividend of $2.95 per share, down 18% on the prior corresponding period. Whereas the market is expecting a $3.10 per share final dividend according to the Bloomberg consensus.
However, given APRA's recent guidance that ADIs should consider deferring discretionary capital management, and the uncertainty in the global economy post the outbreak of the COVID-19 pandemic, the broker concedes that management may choose to defer this dividend.
What about FY 2021?
Traditionally Macquarie provides its guidance for FY 2021 with its full year results release.
While this year could admittedly be different due to the current economic environment, Goldman Sachs' analysts have laid out their expectations for the next financial year.
They are forecasting a sizeable 33% decline in net profit after tax in FY 2021, which compares to the Bloomberg consensus estimate for a 6% decline.
Is Macquarie a buy?
I think Macquarie is a quality company worth considering as a long term buy and hold. Though, with its result release just days away, it may be prudent to wait for that before investing.
Incidentally, Goldman Sachs has a neutral rating on its shares but a lofty $120.03 price target. This implies potential upside of over 24% excluding dividends over the next 12 months.
