Netwealth Group Ltd (ASX: NWL) shares tumbled 4% yesterday, finishing Monday's trading at $31.21.
Despite the drop, Netwealth shares remain up almost 14% over the last year.
Netwealth is a financial services and technology company. It provides a wide range of products and services to the Australian financial investment industry, including cloud-based investment administration software as a service (SaaS), a retail superannuation fund, and an administration business.
The stock price for Netwealth shares has fluctuated over the past 6 months. It rose on the back of strong FY25 results.
However, following a strong month in August, it tumbled 15% during September.
When shares experience this kind of volatility, it can make it difficult to put a finger on where fair value truly sits.
Late last week, Macquarie provided just that, with a new report on Netwealth shares. Based on the outlook from the broker and yesterday's 4% drop, this financials stock could be a value option.
Lets see what the broker had to say.
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Outlook unchanged
Macquarie reported that Netwealth's September-quarter FUA net inflows of $4.08 billion were slightly below its estimate but in line with consensus, bringing total FUA to $120.8 billion, modestly ahead of expectations due to stronger markets.
Macquarie's FY26E outlook for Netwealth remains unchanged, with FUA net flows expected to be broadly in line with FY25 (MRE $15.48bn, Cons $16.11bn vs $15.4bn).
Operating expenses are forecast to grow at a similar pace to FY25.
Despite a robust outlook, we retain our Neutral rating given a challenging PE relative multiple of 3.3x, equivalent to ~10% premium to the 5-year average.
Price target adjustment
The broker has maintained its neutral rating and adjusted its 12 month target to $33.75.
It was previously $33.85.
However after yesterday's 4% drop, the price target indicates an upside of more than 8%.
Macquarie isn't the only broker with an optimistic view on Netwealth shares.
Analysts from Citi recently upgraded Netwealth shares to a buy rating with a $35.00 price target.
If the share price reached this target in the next 12 months it would be a 12.14% rise from yesterday's closing price.
