Long-term owners of Macquarie Group Ltd (ASX: MQG) shares have been treated to significant profit growth in the past decade. Can the global investment bank keep the strong run going in the next few years?
It's one of the businesses on the ASX that's most exposed to the global economy. The recent volatility experienced by the bank – down 15% since 17 February 2025 – seems to be because of investor worries regarding trade between the US and a number of other countries and how that may affect future earnings.
This recent decline may have opened up an opportunity for investors who are interested. Let's have a look at where the profit could go, thanks to predictions from the broker UBS.
This year, FY25 for Macquarie shares
There's not much to go off Macquarie's current financial year, but FY25 is probably the most important year because it's the next annual result that investors will hear about.
The global investment bank recently revealed its FY25 third-quarter update, which noted that net profit after tax (NPAT) for the nine months to 31 December 2024 was "broadly in line" with the nine months to 31 December 2023.
UBS said this update was weaker than expected, originating from the commodities and global markets (CGM) business. Due to that, it decided to reduce its cash earnings estimates by roughly 5% for FY25, FY26, and FY27.
CGM is just one part of the Macquarie business. It also has a banking and financial services (BFS) business, the Macquarie Asset Management (MAM) business, and its investment banking division, Macquarie Capital.
When discussing its neutral rating on Macquarie shares, UBS said:
The investment case in our view continues to hinge around asset realizations, capital deployment and performance fees in MAM, validation around the sustainability of profits within CGM and improvements in capital market activity, beneficial to MacCap. The market has continued to look through a number of soft prints and earnings misses for MQG over the past 12 months and we expect further earnings downgrades on the back of the Q3 25 update. Asset realizations (full or partial) are still expected in Q4 25E (Corio flagged) but higher development capex is needed to get these assets into a position to sell and Macquarie are clear they are not forced sellers.
In FY25, UBS expects the business to see net profit fall to $3.4 billion despite a forecast revenue of $17.1 billion.
How about next year, FY26?
Net profit is expected to improve in the 2026 financial year, which may help investors feel more confident about sending Macquarie's shares higher again.
The 2026 financial year could see $18 billion in revenue and $4 billion in net profit (up 16.5% year over year).
Further profit growth projected in FY27
The pace of profit growth in the 2027 financial year is still expected to be in the double digits, but slower than FY26.
UBS is projecting that Macquarie's revenue could rise to $18.9 billion and net profit could jump to $4.4 billion (up 11%).
More earnings expected in FY28
The 2028 financial year could get even better for the owners of Macquarie shares.
In FY28, UBS suggests that the ASX financial share could generate $20.2 billion in revenue and make $5.12 billion in net profit (up 15.2% year over year).
What about the final year, FY29 for Macquarie shares?
The 2029 financial year could be the best one of this series for Macquarie shares.
The global investment bank is predicted to generate $21.6 billion in revenue and achieve $5.85 billion in net profit (up 14.4% year over year). If it achieves that, it'd mean it's trading at 13x FY29's estimated earnings at the current valuation.
