Macquarie shares have slumped by 28.13% in 2020, as one of many ASX bank shares to be hammered by the coronavirus pandemic. The Aussie bank was one of the contributors to the S&P/ASX 200 Index (ASX: XJO)'s descent into into a bear market in March.
But there are increasing signs of positivity in the Aussie economy. The coronavirus curve is flattening and we're slowly adjusting to a new normal. But is now a good time to invest $1,000 in Macquarie shares or should you be keeping your cash elsewhere?
Why Macquarie shares have slumped in 2020
It's been a busy start to the year for the ASX bank shares. It seems like an age ago that Commonwealth Bank of Australia (ASX: CBA) reported a $4,477 million half-year cash profit on 12 February. And in some ways, it was, as this was before the full impact of COVID-19 reached Australian shores.
Macquarie shares could be on the move when the bank releases its much-anticipated earnings update. The Aussie bank is different to its big four peers like National Australia Bank Ltd (ASX: NAB), which announced a 51.4% slump in cash earnings and $1,161 million of impairments.
However, that's not to say that Macquarie is immune from the economic uncertainty. The group does have less retail banking than its major bank peers but I would expect some business areas have been hit hard. In particular, Macquarie has large interests in major infrastructure projects and generates strong revenues from its investment banking operations.
That means Macquarie shares haven't fallen lower in 2020 for no reason, but are they in the buy zone?
Is now a good time to buy Macquarie shares?
I think Macquarie could be better placed than many of the big four. I believe that the banks will bounce back from dividend cuts and continue to post strong earnings in the years ahead.
However, Macquarie shares have a couple of key advantages. The bank is less threatened by the rise of neobanks and has arguably less exposure to a residential property crash. That means the current $99.45 valuation could be a bargain, but I would still rather wait until after the bank releases its earnings before I buy.
Foolish takeaway
There are risks in all sorts of investments. However, I think Macquarie shares could be undervalued and I'll be watching the bank's full-year results closely.
