Macquarie Bank Ltd (MBL) Share Trading Recommendation

Submitted by Craig Strzelecki on 13 February, 2007 - 19:21

Macquarie Bank Ltd (MBL) have a retained Buy share trading recommendation and a prce target of $97.27 from analyst Citigroup Investment Research (CIR). According to the analyst, expectations of an upgrade at the Operational Briefing proved correct, with 2H07 earnings to be "probably slightly down on 1H07 (excluding MGQ)", implying up to 47% growth on the pcp. CIR have marginally raised their core FY07e EPS forecasts by 0.4%, leaving FY08 & FY09 unchanged. Key drivers spotted by the analyst include: continued strength in global M&A markets (Thames Water an important contributor); robust equity markets in Australia and Asia; and a significant level of asset sales (UK & China properties, Stagecoach, US Small Cap Roads, Taiwan Cable TV, Smart Carte). Asset sales appear to have had a greater impact on group earnings than we had anticipated. In essence, CIR have removed $33m of operational earnings (raised M&A income but cut equity market related income) and added a further $46m of asset sale profits. MBL notes the following key positives as: (i) increased balance sheet capacity with Tier 1 capital rising 230bp to 15.5% at 31 Dec (driven by asset divestments, earnings and the recent DRP); and (ii) strong commentary suggesting substantial demand for unlisted funds remains, which CIR attribute to success breeding success given supernormal returns from some unlisted fund investments of late. CIR continues to remain positive on MBL given still strong EPS momentum and a relatively undemanding valuation.

Macquarie Bank Limited is listed on the Australian Stock Exchange (ASX) under stock code MBL. You can view their investor website here. MBL was listed on the ASX on 29 July, 1996. Allan E Moss is the Managing Director Macquarie Bank. MBL is a provider of Investment Banking, Banking and Financial Services. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade MBL. Check your charts and good luck with your share trading!