Macquarie Bank (MBL) Share Trading Recommendation

Submitted by Craig Strzelecki on 4 May, 2007 - 18:22

Macquarie Bank (MBL) has a reiterated Buy rating and a $105.94 share price target from sharemarket analyst Citigroup Investment Research. Result Preview and Earnings Upgrade: In reviewing MBL's lead indicators and taking account of recent group activity ahead of the FY07 result (15 May), the analyst has upgraded its core EPS forecasts by +0%, +4% and +4% over FY07e-FY09e. They now anticipate 56% growth in FY07e NPAT to $1,427m against company guidance of "at least 50%" NPAT growth. Their share price target rises 4% to $105.94. Three Key Drivers to Macquarie Bank: While FY07e growth was broad-based, The analyst highlights three key drivers: (i) Asset realizations (aided by gains on MGQ, DXL and an oil & gas asset); (ii) M&A advisory (with transactions involving BAA, Thames Water, Promina, Developers Diversified Realty and Alinta); and (iii) Stockbroking (given strong equity and derivative volume growth in Australia, Hong Kong and Singapore). Unlisted Fund Success Breeds More Success: The news that two of MBL's unlisted infrastructure funds (MEIF II & MIP) will extend their EUM to US$10.3bn suggests that the success of these funds continues to breed new success. This bodes well for continued growth in group EUM, base fees and M&A fees. Flying Start to FY08e: Together with a significant level of asset gains in April, the group is off to a flying start in just the first month of its new fiscal year. The asset gains CIR estimate for Boart Longyear ($200m) and ATM Solutions ($68m) represent 36% of asset realizations forecast in FY08e. Buy Rating Reiterated: The analyst reiterates their Buy rating and $105.94 target price for Macquarie Bank (MBL) with the stock continuing to trade on an undemanding FY08e PER of 15.2x and a strong tailwind with regards to earnings momentum across the business.

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. David Clarke is the chairman of Macquarie Bank and the managing director is Allan E Moss. The company is involved in investment Banking, Banking and Financial Services. Macquarie is a diversified international provider of financial and investment banking services, headquartered in Sydney, Australia. Macquarie Bank evolved from Hill Samuel Australia Limited, which was established in 1969 as a subsidiary of the UK merchant bank, Hill Samuel & Co. In 1985, a banking licence was acquired and operations began under the name Macquarie Bank. In 1996, Macquarie Bank’s fully paid ordinary shares were quoted on the Australian Stock Exchange. In Australia, Macquarie is a full-service investment bank providing financial market trading and advisory products and services. In the Asia-Pacific region, the Bank provides a broad range of investment banking services and in the Americas, Europe, Africa and the Middle East, it focuses on particular business areas in which its expertise delivers value to clients. Macquarie has reported successive years of record profits and growth since 1992, and now employs over 10,000 people in 24 countries. 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!

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