Macquarie Group Ltd (ASX: MQG) has built an impressive business, with operations spanning financial markets around the world.
And while its earnings can fluctuate from year to year, I think the longer-term growth opportunities remain attractive.
But could that be enough to take the Macquarie share price to $300 in 2027?
Let’s take a closer look.
Why I like Macquarie
One of the things I like about Macquarie is how many ways it has to make money.
Its Australian banking operations provide exposure to mortgages, deposits, and business lending, while its asset management division invests in infrastructure and other assets around the world.
Macquarie also has substantial operations in commodities and global markets, alongside an investment banking business that benefits from corporate transactions and capital raising activity.
I think that combination gives Macquarie a positive growth profile.
When financial markets are active and companies are investing, Macquarie can benefit from increased transaction activity and demand for its services.
Meanwhile, its banking and asset management operations provide other sources of earnings.
There are also long-term opportunities in infrastructure investment, particularly as countries expand their energy networks, transport systems, and digital infrastructure.
Of course, Macquarie’s exposure to financial markets means profits can be uneven. Investment realisations and transaction activity can make a meaningful difference to annual results.
But over a longer period, I think the company’s global reach and experience put it in a strong position to continue growing.
What would it take to reach $300?
The Macquarie share price is currently trading around $248.79.
Reaching $300 would require a gain of approximately 21%, which I don’t think is unreasonable over the next couple of years, particularly when you look at its earnings outlook.
Consensus forecasts point to earnings per share (EPS) of $13.37 in FY27, increasing to $13.93 in FY2, and $15.59 in FY29.
That suggests relatively modest growth initially, followed by a stronger improvement in FY29. For me, that is an important distinction when considering the timing of a potential move to $300.
At the target share price, Macquarie would trade on a P/E ratio of approximately 22 times FY27 earnings and 21.5 times FY28 earnings.
Those are fairly substantial multiples for a business whose profits can fluctuate with financial market conditions.
But the valuation becomes more reasonable when looking towards FY29. At $300, Macquarie would trade on approximately 19 times forecast FY29 earnings.
I think that could be justified for a high-quality global financial services business with opportunities to keep growing into the 2030s.
Is 2027 too soon?
I certainly wouldn’t rule out Macquarie reaching $300 next year.
Share prices often move ahead of earnings, particularly when investors expect a stronger period of profitability.
But I think 2028 may be a more realistic timeframe.
By then, Macquarie should be further along its expected earnings recovery, potentially making investors more comfortable paying a higher price for the shares.
Foolish takeaway
I think $300 is a realistic longer-term target for the Macquarie share price, with 2028 looking more achievable than 2027.
I particularly like that the company has several avenues for growth, and I would be comfortable owning the shares well beyond either of those dates.
At around $249, Macquarie remains a long-term buy for me. I’d be happy to give it time to work towards $300 and potentially much further.
The post Could the Macquarie share price reach $300 in 2027? appeared first on The Motley Fool Australia.
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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.