The Macquarie Group Ltd (ASX: MQG) share price had a subdued session on Friday.
The investment bank's shares edged lower after investors gave a lukewarm response to its full-year results release.
For the 12 months ended 31 March, Macquarie reported a 10% increase in full-year net profit to $5.18 billion.
However, given that Macquarie's half-year profit was up 25% to $2.88 billion, this implied a meaningful slowdown in its growth during the second half.
Nevertheless, with the Macquarie share price now down 14% from its 52-week high at $177.35, investors may be wondering if now is a good time to invest.
Is the Macquarie share price good value?
Analysts at Goldman Sachs have been running the rule over the Macquarie result and note that it was in-line with expectations. It commented:
MQG's FY23 NPAT was up +10% on pcp, broadly in line with GSe, but 4% ahead of Visible Alpha consensus. In terms of composition, pre-tax profit was 3% ahead of GSe, but offset by a higher tax rate. MQG's surplus capital position improved to a record A$12.6 bn. The final DPS was A450cps (GSe A445cps), equating to a 2H23 payout ratio of 60%, and we note MQG will neutralize the impact of the DRP (and MEREP) via the purchase of shares on-market.
However, despite this, the broker isn't in a rush to recommend its shares as a buy. It adds:
Macquarie's FY23 result was driven by its CGM division, and pleasingly, the division continues to exhibit positive asymmetry in its performance, a point that was well-made by management on the recent tour of its Americas operations.
However, our revised FY24E forecasts, which we see as broadly consistent with management guidance provided today by MQG, now sit 9% below where Visible Alpha consensus was ahead of today's result, and imply an 18% fall on pcp. While management has historically been conservative in setting guidance, conditions remain uncertain in MQG's market-facing businesses, which we think limits the near-term upside risk to earnings.
In light of the above, the broker has reaffirmed its neutral rating with a $192.01 price target. Though, the good news is that this still implies potential upside of 8.3% from current levels. Goldman also expects a 3.4% dividend yield in FY 2024.
