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

Credit Suisse shares plummeted 24% overnight and are taking ASX bank shares down with them today. Is this a buying opportunity?

| More on:
Woman looking at her smartphone and analysing share price.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • ASX bank shares opened lower after Credit Suisse plummeted 24% overnight, stoking fears of a contagion in the global banking system stemming from two US bank collapses 
  • The Macquarie share price is suffering the most among the major ASX bank shares today, opening 4% lower at $170.96
  • Broker Morgans has an add rating on Macquarie shares with a 12-month price target of $214.51 

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 Index (DJX: .DJI) 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.

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.

More on Bank Shares

A woman looks questioning as she puts a coin into a piggy bank.
Bank Shares

Do ANZ shares present better value than other Big Four options?

Here's my take on whether ANZ is a good value investment right now.

Read more »

Happy man at an ATM.
Bank Shares

These ASX bank shares are cashing in on new highs today

Bank stocks are still in vogue.

Read more »

a small child carrying a brief case tries to reach an elevator button outside closed elevator doors.
Bank Shares

Why this top fundie is 'happy to be short' on CBA shares

CBA shares have soared more than 50% in a year, but this fundie thinks the party’s about over.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Bank Shares

Should I dump my holding in CBA shares and buy an ASX S&P 500 tracker instead?

Deciding between CBA and an S&P 500 tracker is a no-brainer for me.

Read more »

Businessman smiles with arms outstretched after receiving good news.
Bank Shares

CBA and Klarna: What a $1.8 billion IPO windfall could mean for shareholders

The bank's ongoing rise continues to defy the bearish crowd.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Bank Shares

$10,000 invested in Westpac shares 12 months ago is now

Would you be smiling now if you invested in the big four bank a year ago? Let's see.

Read more »

a woman wearing the black and yellow corporate colours of a leading bank gazes out the window in thought as she holds a tablet in her hands.
Bank Shares

These 3 headwinds make CBA shares a sell: expert

This leading expert believes now is a good time to take profit on CBA shares. Let’s find out why.

Read more »

Happy young woman saving money in a piggy bank.
Bank Shares

Are ANZ shares still in the buy zone near 6-month highs

Bank stocks have rallied hard in 2024.

Read more »