The Macquarie Group Ltd (ASX: MQG) share price had a tough time in May.
During the month, the investment bank's shares lost approximately 6.5% of their value.
This is more than twice the decline of the ASX 200 index over the same period.
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Why did the Macquarie share price tumble in May?
There were a couple of catalysts for the weakness in the Macquarie share price in May.
The first was broad weakness in the banking sector, which saw almost all ASX 200 bank shares drop deep into the red last month.
In addition, the release of Macquarie's full-year results appears to have weighed on its shares during the month.
As a reminder, for the 12 months ended 31 March, Macquarie reported a net profit of $5.18 billion, which was up 10% from FY 2022. This followed a strong performance in the second half, with Macquarie's profit of $2.88 billion increasing 25% half on half.
While this was a strong result on paper, the broker community wasn't overly impressed. This is largely due to its growth coming from the Commodities and Global Markets (CGM), which is a business that is hard to predict.
Broker response
Commenting on the result, Morgans said:
In our view, it could be argued this was a lower quality beat by MQG, but there is no doubt the diversity of its franchise seems to help MQG generally find a way to outperform.
Given MQG has already said volatility in some of its CGM operations started to subside in 4Q23, we see FY24 earnings risks as likely weighted to the downside, although noting similar risks in prior years did not eventuate.
Though, it is worth noting that Morgans sees value in the Macquarie share price at the current level. It has an add rating and $201.80 price target.
Over at Goldman Sachs, its analysts also highlight that Macquarie's other businesses have uncertain outlooks. It commented:
While management has historically been conservative in setting guidance, conditions remain uncertain in MQG's market-facing businesses, which we think limits the near-term upside risk to earnings.
Its analysts aren't as positive, though. They have a neutral rating and $192.01 price target on its shares.
