Macquarie share price slides amid banking rout, broker tips 24% upside

Woman looking at her smartphone and analysing share price.Woman looking at her smartphone and analysing share price.

The Macquarie Group Ltd (ASX: MQG) share price opened 4% lower today at $170.96 amid the S&P/ASX 200 (ASX: XJO) tumbling by more than 130 points.

This follows tumultuous trading sessions overnight across Europe and in the United States after shares in Credit Suisse Group AG (SWX: CSGN) plummeted 24%, prompting a halt in trading.

Credit Suisse is Switzerland’s second-biggest bank.

Investors fear a contagion in the global banking system stemming from the collapse of Silicon Valley Bank (SVB) and Signature Bank in the US over the past week.

All this drama is having a flow-on effect on ASX bank shares.

Today, they are once again in the red, with the Macquarie share price faring worst.

Let’s take a look.

What’s happening with the Macquarie share price today?

The Macquarie share price is down 3.2% to $172.38 at the time of writing.

Here’s what’s happening with the other ASX bank shares today:

  • The ANZ Group Holdings Ltd (ASX: ANZ) share price is down 2.4%
  • The National Australia Bank Ltd (ASX: NAB) share price is down 2.33%
  • The Westpac Banking Corp (ASX: WBC) share price is down 2%
  • The Commonwealth Bank of Australia (ASX: CBA) share price is down 1.8%.

The banking majors have all taken a hit following the collapse of SVB last week.

The Macquarie share price has fallen by 7.85% over the past five trading days.

Is the Macquarie share price a buy after a near 8% fall?

So, is this a buy-the-dip opportunity on ASX bank shares — and particularly Macquarie at this price?

As my Fool colleague James reported this week, Morgans is backing the Macquarie share price for significant growth over the next 12 months.

The broker has an add rating on the ASX bank share with a 12-month price target of $214.51.

This implies a potential upside of 24.5% for investors who buy Macquarie shares today.

Morgans likes how Macquarie is travelling in FY23 and cites structural growth opportunities.

Morgans says:

MQG is a quality franchise, exposed to structural growth areas, and the company has performed exceptionally well in a more difficult FY23 environment.

MQG has also consistently delivered attractive returns over time (~15% average ROE) and with >10% share price upside to our price target (A$214), we maintain our ADD recommendation.

Macquarie’s FY23 Q3 trading update on 7 February shocked analysts, with fellow broker Goldman Sachs noting it implied that Macquarie has already achieved about 97% of the broker’s FY23 profit forecast.

Morgans tips Macquarie to pay a partly franked dividend of $7.41 per share in FY23 and $7.13 in FY24.

Based on today’s fallen Macquarie share price, this means dividend yields of 4.3% and 4.1% respectively.

What’s the story with Credit Suisse?

As we reported earlier, Credit Suisse stock plunged after its major shareholder, Saudi National Bank (SNB) confirmed overnight that it would not increase its position in the bank.

SNB holds a 9.88% stake in Credit Suisse. It can’t buy more because of regulatory restrictions.

Credit Suisse shares had already fallen by 30% since early February before the comments last night.

The 24% freefall that followed prompted an automatic pause in the trading of Credit Suisse shares. The stock has now lost more than 50% of its value since early February.

Credit Suisse also dragged down other European banking stocks and US banking shares overnight.

French banking stock Societe Generale SA fell 12.2% and German bank Commerzbank AG fell 8.7%.

The US Dow Jones Industrial Average closed down 0.87% while the United Kingdom’s FTSE 100 Index fell 3.8%, the biggest single-day loss since Russia invaded Ukraine.

Credit Suisse has been beset with problems for some time now.

The Swiss central bank has pledged to provide Credit Suisse with extra liquidity if required.

The post Macquarie share price slides amid banking rout, broker tips 24% upside appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has positions in Anz Group, Commonwealth Bank Of Australia, Macquarie Group, and Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia

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