Which ASX financial stock could deliver 30% upside?

MA Financial Group Ltd (ASX: MAF) was one of the highfliers among financial shares last calendar year, but the shares have been staging a retreat over the past three months.

The analyst team at Jarden believes this presents an opportunity to get in on the action and has a bullish share price target on the company, which we’ll get to later.

Firstly, what does MA Financial Group do?

Diversified financial offering

MA Financial Group has three key pillars of the business: alternative asset management, lending and technology, and corporate advisory and equities.

Jarden is predicting strong earnings growth, which they believe has been sold down partly in response to bad news in the US private credit space.

As they said in a research note to clients:

Following 31% earnings per share growth in FY25, we forecast 38%/22% growth in FY26/27, driven by continued double-digit assets under management growth in asset management focussed in real estate and private credit, strong operating leverage in MA Money business (FY26E loan book growth forecast 62%), and a moderating drag from the US business.

Jarden said there were few signs of stress locally around private credit, with the issues in the US driven in large part by loans to unlisted software companies, which are being caught up in the AI revolution.

Strong historical performance

Jarden said MA Financial Group had a strong track record of lending to corporates, with a 0% loss history and no loans in arrears.

They said they were overweight on the shares for several reasons.

Fundamentally, we like the story. There are multiple earnings drivers, and management have executed well. MA Money is easily surpassing MAF’s expectations with book growth in excess of 100%. From a rating standpoint, we initiate at Overweight (as opposed to Buy) due to risks including: 1) we are about 9% below FY26 NPAT consensus, driven primarily by a more conservative Transaction Revenue forecast of $34m. Consensus looks achievable but in our view most things need to go right including comping strong non-recurring revenue in asset management; 2) the macro environment (including private credit concerns) and rising interest rates present a degree of near-term uncertainty; and 3) competition more broadly across commercial real estate credit, asset backed securities markets and mortgages.

Jarden says MA Financial Group shares are trading at their lowest price-to-earnings ratio in almost 2 years, and it has a price target of $9.45, compared with $7.15 at the time of writing, which would represent 32.2% upside if achieved.

MA Financial Group was valued at $1.37 billion at the close of trade on Monday.

The post Which ASX financial stock could deliver 30% upside? appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ma Financial Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.