The Macquarie Group Ltd (ASX: MQG) share price is trading lower again on Tuesday.
The investment bank’s shares are currently down 1% to $171.74.
This means the Macquarie share price is now down 6% from the record high of $182.66 it reached last week.
Is the Macquarie share price in the buy zone?
A number of brokers have been giving their verdict on the Macquarie share price and have very different opinions.
For example, the team at Ord Minnett are positive on the company. They have an accumulate rating and $190.00 price target on its shares.
Based on the current Macquarie share price, this implies potential upside of ~11% before dividends.
Ord Minnett is confident on the investment bank’s long term growth prospects and believes its shares are reasonably priced.
Over at Goldman Sachs, its analysts are sitting on the fence. Goldman has a neutral rating and $170.62 price target on the company’s shares. This is broadly in line with where its shares are trading today.
The broker commented: “The earnings upgrade cycle continues for MQG and since troughing in May-20, its 12-mo forward EPS has risen 52%, and sits within 2% of its Apr-19 peak. However, since Apr-19, its share price is nearly one-third higher. Therefore, with MQG currently trading on a 12-mo forward P/E of 20.5x, with incremental earnings upgrades still coming largely from investment income and trading, we stay Neutral.”
Finally, the team at Citi believe the Macquarie share price is overvalued at the current level.
Earlier this month, the broker put a sell rating and $153.00 price target on the company’s shares. This implies potential downside of 11% over the next 12 months.
While Citi acknowledges that its guidance upgrade was a positive surprise, it isn’t enough for a change of rating.
Citi explained: “MQG has provided guidance for the 1H22 result to be ‘slightly down’ on 2H21, implying a range of ~$1.8-2.0bn of NPAT for the half. As we flagged recently, this implies another quarter where profitability has approached $1bn. This sees 1H22 earnings as being materially ahead of consensus (Visible Alpha $1.55bn), but slightly ahead of CitiE (prior forecast $1.78bn).”
“The stock has reacted positively to the guidance upgrade (+5%), but consensus is largely upgrading on the back of one-time MIC wind-down revenues. At 22x FY23 earnings the stock remains expensive in our view,” it concluded.
Time will tell which broker makes the right call.