How did the Macquarie (ASX:MQG) share price stack up in November?

We take a look at how Macquarie Group Ltd performed last month.

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Shares in Australian investment bank Macquarie Group Ltd (ASX: MQG) marginally outperformed the benchmark S&P/ASX 200 index (ASX: XJO) last month.

Whereas the broad index slipped 1.56% into the red, the Macquarie share price dipped by 0.97%.

How did Macquarie shares compare to other financials?

The S&P/ASX 200 Financials index (ASX: XFJ) declined 7.4% in November, demonstrating weakness in the sector. But Macquarie outperformed, with each of the other major financials booking substantial losses for the month.

In the early days of November, Macquarie shares once again breached the illustrious $200 per share mark. The stock continued on to post a record closing high of $208 mid-month.

After a smooth acceleration upwards to its record high, the Macquarie share price then levelled off and reversed course. This came amid reports of an industry-wide $80 billion tax scandal towards the end of November. The scandal stems from a German tax loophole believed to have been exploited by many banks between 2001 and 2012.

Whilst Macquarie is amongst more than 100 financial institutions being investigated, its involvement was enough to catch the market’s attention and derail investor sentiment.

As fellow investment bank, JP Morgan recently put it, the FY21 major bank reporting season was “very volatile”.

The mixed results had investors rethinking their capital allocation to ASX financials, according to the broker. This boded poorly for the sector.

Despite the challenges, Macquarie shareholders were relatively unscathed in November and held on to their year-to-date gains.

Is today’s Macquarie share price a buying opportunity?

The team at JP Morgan reckons so. They value Macquarie shares at $214. On Friday afternoon, the Macquarie share price is $199.77, so this implies an upside potential of 7%.

JP Morgan thinks growth trends are set to continue in Macquarie’s Commodities and Global Markets (GCM) segment in FY22. This division has already delivered a 60% year-on-year growth in net profit after tax (NPAT) contribution in the first half.

The broker also notes that Macquarie Investment Management (MIM) will benefit from the Waddell & Reed acquisition.

It also says the bank’s Banking & Financial Services (BFS) division has “potential to double the size of the Australian mortgage book over the next three to four years”.

Fellow broker Jefferies is also bullish and assigns a $214 target on the Macquarie share price.

However, the team at Morgan Stanley have the most optimistic projections, valuing Macquarie at $245 per share from internal modelling.

Finally, the team at Citi recently upgraded its rating on the bank following its first-half results in September. Citi notes it is the fourth sequential quarter that Macquarie recognised more than $1 billion in net profit.

In a recent note, the broker also confirmed that Macquarie’s share purchase plan has had no impact on its price valuation of the Aussie investment bank.

It values Macquarie at $226 per share, implying a margin of safety of more than 13% at the time of writing.

Overall, 62% of the analysts covering Macquarie have it as a buy. Just one broker says sell with a $145 share price target.

The Macquarie share price has risen by 44% in the past 12 months.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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