The Macquarie Group Ltd (ASX: MQG) share price has gone on an incredible run recently, rising by 37% in the past year. The question now is whether the ASX financial share will be able to continue this strong run.
Past performance is not a reliable indicator of future performance, particularly after such a significant rise over a relatively short amount of time.
As a global investment bank, Macquarie is integrated into the local and global economy. It has been affected by these uncertain times of elevated inflation and high interest rates. But with its large rise, the market seems more optimistic about the business than ever.
Let's look at what analysts are expecting from the business.
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2025 predictions
Let's look at perhaps the most important thing first – thoughts on the Macquarie share price.
Broker UBS has a neutral rating on Macquarie shares, so it's neither positive nor negative.
A price target is where the broker thinks the share price will be in 12 months from the time of the rating. UBS has a price target of $225 on Macquarie shares, implying a possible decline of more than 3%.
In other words, UBS suggests the ASX financial share has risen as far as it can in the short term. Of course, the market could become even more optimistic about Macquarie shares than it already is.
UBS noted that in the FY25 first-half result, Macquarie's profit was weaker than expected, dragged down by a weaker performance from the commodities and global markets (CGM) division, mostly related to commodity risk management. The result was "compounded by delays" in asset realisations/sales, according to UBS.
After seeing the HY25 result, UBS downgraded its earnings forecasts for the next few years.
The broker pointed out that analysts have been reducing profit forecasts, yet the Macquarie share price is close to an all-time high.
UBS wrote:
The investment case in our view continues to hinge around asset realisations, capital deployment and performance fees in MAM [Macquarie Asset Management], validation around the sustainability of profits within CGM and improvements in capital market activity, beneficial to MacCap [Macquarie Capital].
The broker notes that Macquarie shares are trading above their historical levels.
FY25 projections
For FY25, Macquarie is predicted to generate $17.4 billion in revenue, $5 billion in pre-tax profit, $3.64 billion in net profit, and $9.66 in earnings per share (EPS).
If that forecast comes true, it means the Macquarie share price is valued at 24x FY25's estimated earnings.
