The Macquarie Group Ltd (ASX: MQG) share price edged higher to finish in the green today, closing the session at $196.32.
That earmarks Macquarie for its third all-time high in three consecutive days this week, as the banking giant now extends its rally in the past month to a 9% gain.
Here we uncover what's been driving this price action for the company.
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What's been fuelling the Macquarie share price lately?
Zooming out and taking a birds-eye view over a longer time frame, it's clear that Macquarie shares have been on an upward trajectory for about a month now.
As we commenced the walk through October, Macquarie released an investor presentation that gave some colour on its outlook for the coming periods.
In the presentation, the bank explained that it anticipates a slight down-step in earnings from the second half of FY21, although still expects a substantial jump in operating profit in Q1 FY22.
Aside from this, Macquarie also reckons it will record a significant growth period from the same time last year in H1 FY22.
Macquarie is also firm on the belief that its pivot into renewables will soon begin to yield positive returns, particularly as secular energy trends divert energy consumption towards greener alternatives.
The bank has a $2 billion exposure to the renewables sector, with another $45 million ready to put into the field, per its investor presentation.
Brokers vote Macquarie is a buy
In addition to these factors, several brokers are bullish on the Macquarie share price and feel there is plenty more upside yet to be priced in.
Analysts at Morgan Stanley have a $240 price target on Macquarie shares, a figure the broker justifies due to Macquarie's renewables exposure.
In its report, Morgan Stanley exclaimed that "Macquarie's critical scale in renewables should command a further 'green premium' and reduce its cost of capital".
Fellow analysts at peer investment bank JP Morgan are also bullish on Macquarie, albeit with a tighter price target of $190.
The broker models a 15% net profit after tax (NPAT) growth in FY22, alongside a 15% return on equity for shareholders from FY22–24.
JP Morgan reckons that Macquarie's annuity divisions will continue to drive strong medium-term growth, in addition to the accretive benefits earned on recent divestments.
It also feels that Macquarie Asset Management is well positioned to capitalise on structural demand pull from investors for exposure to alternative asset classes such as infrastructure, managed futures or commodities.
After hitting another record high today, the Macquarie share price has climbed 42% this year to date, and around 46% in the past 12 months.
