The Macquarie Group Ltd (ASX: MQG) share price has been on an upward trajectory for the past few weeks.
Shares in the investment banking giant started the week’s trading at $200 apiece, which is an approximate 5% climb this past week and another record high for the company.
That’s well ahead of the S&P/ASX 200 Financials Index (XFJ) which has nudged around 2% higher in the same time.
As a result, Macquarie claims its spot on the mantlepiece as one of only 3 ASX shares jumping the gulf into the $200/share club.
What tailwinds are behind the Macquarie share price?
Over the past month, the Macquarie share price has been marching towards the ceiling, having gained around 11.5% in that time.
Macquarie stepped into the month of October by releasing a presentation to provide investors with upcoming expectations and guidance for the coming periods.
The presentation detailed the bank’s earnings outlook for the first half of FY22, where it anticipates a decrease in earnings from H2 FY21, but still a substantial increase from the same time last year.
Macquarie reckons it will recognise a jump in operating profit this quarter, underscored by the divestment of several former business segments.
Moreover, the company is firm on its positioning in the renewables space, to which it has recently pivoted into.
In fact, Macquarie has taken a serious pivot into renewables, with $2 billion in current funding on its project books and another $45 million at the helm ready to disperse into the green energy field.
Plus with evolving dynamics in energy production and consumption, the bank feels it is well-positioned to capitalise on these trends, in addition to pouncing on other opportunities in the merger & acquisitions (M&A) space in its asset management and infrastructure arms.
Can Macquarie keep on delivering?
Analysts at leading broker Jeffries are adamant the bank can certainly keep on delivering to shareholders and feels its colleagues in the field may be downplaying Macquarie’s earnings too much this quarter.
The broker reckons that the consensus view of $1.8 billion for Macquarie’s earnings in Q1 FY22 could perhaps be a little too downbeat.
It sees the figure as low on the backdrop of a hot-running natural gas and gas market, strengths in its financing business, as well as a spree of acquisitions completed on the ASX this year – all positives to Macquarie, suggests Jeffries.
As such, the broker upgraded its modelling to forecast $2.08 billion in earnings for 1H FY22 and then $3.66 billion for the entire FY22.
It also reckons that the total addressable market size in the renewables sector for the bank is “far greater than its present ($71 billion) market capitalisation” – a bullish signal, according to the broker.
It also consequently raised its price target on the Macquarie share price by 9% to $230, up from $211 at the beginning of the month.
At the current market price, this implies a 16% upside potential for investors, according to Jeffries.
Meanwhile, fellow brokers Morgan Stanley and JP Morgan are also bullish on Macquarie shares.
The former has a $240 price target on the company, whereas JP Morgan reckons investors are in for a period of earnings growth, forecasting around 15% return on equity from FY22–24 for the company.
Bringing it all together, it appears each of these brokers believes that the Macquarie share price has further legs to grow and deliver shareholder returns.
Macquarie shares have climbed 44% this year after rallying 46% in the last 12 months, setting a slue of record highs on a consistent basis in that time.