The Macquarie Group Ltd (ASX: MQG) share price is currently down 1.02%, underperforming the S&P/ASX 200 Index (ASX: XJO) which is up 0.06% at the time of writing.
The big four ASX bank shares are all in the green today. The Commonwealth Bank of Australia (ASX: CBA) share price is up 1%, Westpac Banking Corp (ASX: WBC) shares are up 0.46%, the Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is up 0.84%, and National Australia Bank Ltd (ASX: NAB) shares are 0.95% higher. That's after the NAB share price hit its 52-week high in intraday trade today.
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What's happening with the Macquarie share price?
Macquarie hasn't released any 'price sensitive' news for a couple of months.
However, we recently learned that the Australian Securities and Investments Commission (ASIC) was commencing legal action against the bank, alleging Macquarie's "limited monitoring" of transactions made through one of its systems.
As well, there has been plenty of volatility on the ASX share market this year amid the Russian invasion of Ukraine and an intense focus on inflation and what that might mean for interest rates.
Since the start of 2022, the Macquarie share price has fallen 2%. However, it had fallen much further in early March. Since 7 March 2022, shares in the global investment bank have gone up 15%.
The latest we've heard from Macquarie was its update for the three months to December 2021. It said that quarter was a record quarter, with improved overall market conditions.
Record quarter
Macquarie has two sides to the business – annuity-style businesses and market-facing businesses.
The annuity side includes Macquarie Asset Management and its banking and financial services. This side of the business saw its net profit contribution drop year on year, mainly due to the timing of performance fees and investment-related income.
As at 31 December 2021, Macquarie Asset Management had A$750.1 billion of assets under management (AUM).
The bank's 'markets-facing businesses' refer to commodities and global markets, and Macquarie Capital. This side of Macquarie's business saw its FY22 third-quarter net profit contribution rise "substantially".
Macquarie also said that its markets-facing business's FY22 year to date net profit contribution was up substantially due to higher principal income in Macquarie Capital. This included "exceptionally strong" investment realisations in the infrastructure (including green energy), business services, and technology sectors. Commodities and global markets experienced strong commodities income too.
Can the Macquarie share price deliver outperformance from here?
Citi rates the global investment bank as a buy, with a price target of $226. That implies a possible upside of more than 10% over the next 12 months.
One of the reasons for the optimism is that the broker thinks the commodities and global markets division could generate good profit because of the high prices of commodities amid the Russian invasion of Ukraine.
Citi thinks that the Macquarie share price is valued at 17x FY22's estimated earnings.
