Earlier this week the Macquarie Group Ltd (ASX: MQG) share price charged higher after its third quarter operational update impressed the market.
In case you missed it, the investment bank revealed that it had a record quarter thanks to its market-facing Commodities and Global Markets and Macquarie Capital businesses. While not releasing any actual figures, management advised that their combined profit contribution was up "substantially" on the prior corresponding period.
All in all, this led to analysts across the country upgrading their profit expectations for the full year.
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Is the Macquarie share price good value?
The team at Morgans has been running the rule over the update and has given its verdict on the Macquarie share price.
However, unfortunately for shareholders, the broker believes that the company's shares are trading at a fair value now and sees limited upside in the near term.
According to the note, the broker has retained its hold rating and $200.00 price target on the company's shares. This suggests potential upside of 3.5% for investors based on the current Macquarie share price of $193.28.
Morgans commented: "Overall MQG produced a record result in 3Q22, with FY22 outlook commentary more favourable than previously. The operational briefing was more longer-term focused, but again it reinforced MQG's favourable growth profile. We upgrade FY22F/FY23F EPS by ~17% driven by an uplift to forecasts in MQG's markets facing businesses."
However, for valuation reasons, the broker isn't shifting from its hold rating.
It concluded: "MQG is a quality franchise exposed to structural growth areas, and the company is clearly firing on all cylinders with a favourable operating environment. However, MQG's share price has run hard, and with MQG now trading on ~19x FY22F PE, we see the stock as closer to fair value – HOLD."
