In key news on Australian stocks, Macquarie Group Limited (AU:MQG) shares declined by 2.8% as of writing, after the company released disappointing annual results for FY24. The company reported a 32% drop in its net profit to AU$3.52 billion compared to the previous year. This resulted in Macquarie slashing its final dividend by 14% to AU$3.85 per share, down from AU$4.5 a year ago. The dividend cut led to a total FY24 ordinary dividend of AU$6.40 per share.
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Macquarie Group is a global financial services group providing banking and financial services, asset management, commodities, global markets, and capital markets solutions.
What Dragged Macquarie’s Performance Down?
Macquarie’s performance was dragged down by its CGM (Commodities and Global Markets) and MAM (Macquarie Asset Management) units. CGM contributed a net profit of AU$3.2 billion, marking a 47% decrease from FY23. Given the energy disruptions across the world, the Commodities business has been a key driver of the company’s profits in recent years. However, with the stabilization of global energy markets, there has been a decrease in client hedging and increased volatility, which impacted the performance of the company’s CGM business.
Similarly, MAM’s net profit declined 48% to AU$1.2 billion, triggered by reduced asset sales in green investments.
On the plus side, Macquarie Capital’s net profit jumped by 31%, driven by the expansion in the private credit portfolio, resulting in higher investment income.
Analysts’ Reactions
Analyst Matthew Wilson from Jefferies stated that FY24 was a “tough year” for Macquarie but also anticipates a potential rebound in FY25.
Following the results, Goldman Sachs maintained its Hold rating on the stock, considering sluggish performance and a cautious FY25 outlook. Meanwhile, Citi analyst Brenden Sproules confirmed his Sell rating, predicting a downside of 12.3%.
Are Macquarie Shares a Good Buy?
According to TipRanks’ consensus, MQG stock has received a Hold rating based on two Buys, three Holds, and one Sell recommendation. The Macquarie share price forecast is AU$187.67, which is 2% above the current trading levels.
