The Macquarie Group Ltd (ASX: MQG) share price will be one to watch later this week.
On Thursday morning, the investment bank is holding its annual general meeting and, traditionally, it releases its first quarter update ahead of the event.
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What is expected from Macquarie during the first quarter?
According to a note out of Citi, its analysts are expecting another strong quarter from the investment bank. Its analysts are forecasting a first quarter net profit of approximately $1 billion.
However, Citi has warned investors that the following quarters may not be as positive given the very strong comparable periods that they will be cycling and potential headwinds. Citi explained:
MQG is due to present a quarterly update at its upcoming AGM, which we forecast at NPAT of ~$1bn. While we see little risk around upcoming quarters, we do however see greater uncertainty emerging regarding quarters thereafter.
MQG needs to cycle record quarters in 3Q23 and 4Q23. Volatility is likely to remain elevated, but commodities remains overleveraged to a number of 'crises' while volatility and accelerating rates will start to weigh on deal flow (asset gains and M&A advisory revenues).
In light of this, the broker has retained its neutral rating with a $187.00 price target. Its analysts added:
While there is much talk of a 'cycle' in the market, MQG forward earnings forecasts appear extremely resilient to a tightening of financial conditions and see record earnings plateauing out to FY25. With record tightening underway and a vastly more cyclical business than 5 years ago, we see potential downside risk emerging through the year. We stay Neutral given mid-cycle value, but see risk of consensus revisions.
