The Macquarie Group Ltd (ASX: MQG) share price is on course to end the week on a positive note.
In morning trade, the investment bank's shares are up approximately 4% to $172.81.
Why is the Macquarie share price pushing higher?
The Macquarie share price is rising this morning after investors responded positively to the release of the company's half year results.
For the six months ended 30 September, Macquarie reported an 11% increase in net operating income and a 13% increase in profit after tax to $2,305 million.
The latter was 6.8% ahead of the market consensus estimate of $2,157 million for the half, which helps explain the outperformance of the Macquarie share price today.
What were the drivers of the result?
Macquarie's strong half was driven by its Banking and Financial Services (BFS), Commodities and Global Markets (CGM), and Macquarie Asset Management (MAM) businesses, which delivered double-digit growth in profit contributions.
This offset a softer performance from its Macquarie Capital business, which posted a 12% decline in its profit contribution compared to the prior corresponding period.
Also potentially giving the Macquarie share price a boost was management's positive outlook commentary. Although, CEO Shemara Wikramanayake acknowledges the uncertain economic environment, she believes Macquarie is well-placed to prosper. Wikramanayake said:
Macquarie remains well-positioned to deliver superior performance in the medium term. This is due to our deep expertise in major markets; strength in business and geographic diversity and ability to adapt the portfolio mix to changing market conditions; an ongoing program to identify cost saving initiatives and efficiency; ongoing technology spend across the Group; a strong and conservative balance sheet; and a proven risk management framework and culture.
Broker response
Analysts at Goldman Sachs were impressed with the half. They commented:
MQG's 1H23 NPAT was up +13% on pcp to A$2,305 mn and +6% above GSe and Visible Alpha consensus. The beat versus our forecasts was driven by lower expenses (-8% lower than GSe), partially offset by lower revenues (5% lower than GSe), largely on account of trading income. MQG's surplus capital position improved to A$12.2 bn (A$10.7 bn at FY22).
However, overall, the broker isn't expecting any major changes to consensus estimates for the full year. It explained:
Overall, we think the outlook commentary is unlikely to drive material changes to consensus expectations for FY23 (A$4.2 bn, per Visible Alpha consensus), albeit profit may need to be reallocated from the higher multiple Macquarie Asset Management (MAM) division, into the lower multiple Commodities and Global Markets (CGM) division.
