Financial Wire

Macquarie in a "Goldilocks" Scenario, Morgan Stanley Upgrades Stock

-- Macquarie Group (ASX:MQG) is enjoying a "goldilocks" scenario, benefitting from high volatility in commodities and liquefied natural gas (LNG), while capital markets remain sturdy and demand for real assets rises, Morgan Stanley said Monday in a note.

The investment firm expects Macquarie to deliver strong earnings growth through fiscal year 2026 to fiscal year 2028, led by commodities, performance fees, and growth in private markets and banking.

Macquarie is also expected to see its return on equity recover to the mid-teens by FY28, supported by business restructuring, including exits from lower-return segments such as Air Finance and Smart Meters businesses, and a greater focus on trading platforms.

The brokerage forecasts an additional AU$1 billion in share buybacks, bringing the total to AU$3 billion by fiscal 2028, with total payout increasing to over 80%.

Morgan Stanley upgraded Macquarie to overweight from equal weight and raised its price target to AU$270 from AU$223.

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