Macquarie Group Ltd (ASX: MQG) shares are having a subdued start to the week.
In morning trade, the investment bank's shares are down almost 1% to $161.86.
Why are Macquarie shares falling?
The weakness in the Macquarie share price on Monday appears to have been driven by a poor reaction to last week's half-year results by brokers.
While analysts haven't downgraded the ratings they have on the bank's shares, they have taken an axe to their valuations.
For example, according to a note out of Goldman Sachs, it has retained its neutral rating and cut its price target to $180.80 (from $194.99).
Its analysts are now expecting Macquarie's profits to fall by almost a third in FY 2024. This will be below consensus estimates. It said:
Our FY24E NPAT forecast sits 4% below where management expected consensus to move to post this result (A$3.7-3.9 bn). This would appear to reflect our more negative view around MAM's net profit contribution, where management's qualitative revenue guidance would appear to require a material improvement in the division's 2H24 cost trajectory to hit management's Group NPAT expectations.
Over at Citi, its analysts have retained their neutral rating with a reduced price target of $161.00 (from $175.00). The broker was very surprised with the way the market responded to its result last week. It said:
There was plenty of detail in the result, yet we thought what was most extraordinary was the positive share price reaction (+0.6% vs market) despite the headline miss and likely negative consensus revisions. At a base level, this tells us that the market was pricing in the earnings miss.
Elsewhere, analysts at Morgans have retained their add rating but cut their price target to $182.80 (from $194.41) and Morgan Stanley has retained its overweight rating with a new price target of $202 (from $215).
