Analysts covering the shares of Macquarie Group Ltd (ASX: MQG) are overwhelmingly bullish on the stock despite the volatility in its share price in recent months.
The Macquarie share price has whipsawed in 2022 alongside other ASX financial stocks, as seen below. But unlike the S&P/ASX 200 Financials Index (ASX: XFJ), Macquarie has remained bottom heavy and now rests at $185.98 before the open today.
Sentiment is tilted positive
Analysts at Bloomberg Intelligence reckon that Macquarie's infrastructure funds are set to benefit from "raging inflation" given the current macro backdrop.
"Macquarie's close of a $4.2 billion third Asia-Pacific infrastructure fund vs. a $3 billion target suggests its asset-management funds focused on hard assets may get a boost from raging inflation," they said in a recent note.
Not only that, its analysts reckon the bank's annuity business is set to lead the way this year and that's backed by the commodity boom that continues rolling on.
"Macquarie's annuity businesses may post another year of higher contribution… fuelled by booming commodities markets and interest-rate volatility," they added.
Meanwhile, analysts at JP Morgan recently upped their profit forecasts for FY23 and FY24 whilst also commenting on its "earnings mix re-weight towards [the] annuity division".
"[W]e expect annuity-style divisions to up-weight from 33% of divisional profit in FY22 to ~50% on average over the next few years," the broker said.
"We increase our NPAT forecasts by 2% in FY23 and 4% in FY24. This reflects an increase in MacCap net interest income forecasts and investment income."
Meanwhile, 64% of analysts covering the stock have it as a buy right now, according to Bloomberg data. Just one broker, Credit Suisse, has it rated a sell with a $150 per share price target.
Macquarie shares have clipped a 24% gain in the last 12 months despite trading 9% lower in 2022.
