The Macquarie Group Ltd (ASX: MQG) share price could offer decent upside from current levels.
That’s the view of analysts at Morgans, which have just named the investment bank as one of their best ideas for March.
What does Morgans think about the Macquarie share price?
According to the note, Morgans has picked out its best ideas for the month of March. These are the ASX shares that the broker believes offer the highest risk adjusted returns over a 12-month timeframe and are supported by a higher than average level of confidence.
And while Morgans actually only has a hold rating on Macquarie’s shares, its price target is meaningfully higher than where it is trading today, so it makes the list.
The note reveals that the broker has a price target of $200.00 on its shares at present. This implies potential upside of 13% over the next 12 months based on the current Macquarie share price of $176.67.
In addition, Morgans is expecting a decent dividend yield over the next 12 months. Its analysts are forecasting a $6.63 per share dividend in FY 2022. This equates to a 3.8% yield at current levels, which stretches the total return on offer with Macquarie’s shares to 17%.
What did the broker say?
Morgans sees value in the current Macquarie share price and growth opportunities for the bank in infrastructure and renewables.
Its analysts commented: “We still see MQG as relatively inexpensive and continue to like its exposure to long-term structural growth areas such as infrastructure and renewables. Near term MQG is likely to face earnings pressure from the impact of soft economic conditions but remains well positioned to ride out the current Covid-19 period and seize opportunities on the other side.”
In respect to renewables, Macquarie spoke about some of its plans in the space at the AFR Summit today.
Macquarie’s CEO, Shemara Wikramanayake, said: ”Agriculture is another big source of emissions, a lot bigger here than overseas.”
In light of this, Macquarie is working with the CSIRO to produce new types of plant feed that reduces emissions. It is also focusing on other solutions to help the globe transition away from fossil fuels and combat catastrophic climate change.
Based on what Morgans is saying, its analysts see a big opportunity for Macquarie with these activities.
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