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Equity Bottom-Up

No change to our positive view and AUD 89 fair value estimate following Macquarie Group’s in line third-quarter fiscal 2017 update. The no-moat-rated diversified global financial services business continues to benefit from structural growth opportunities with fiscal 2017 earnings guidance of “broadly in line with FY16” reiterated. We maintain our above-consensus fiscal 2017 earnings forecast of AUD 2.14 billion, which if achieved, will be 4% higher than the record fiscal 2016 result. Despite guidance we see risk to the upside.In our opinion, prospects for further earnings growth are intact. The fiscal 2017 tax rate is guided to be broadly in line with the 30.8% reported for fiscal 2016. Our fiscal 2017 forecast tax rate of 31% is unchanged. Based on our unchanged AUD 89 fair value estimate, the stock is undervalued trading 8% below valuation.Analysts: David Ellis and Ravi Reddy

No change to our positive view and AUD 89 fair value estimate following Macquarie Group’s in line third-quarter fiscal 2017 update. The no-moat-rated diversified global financial services business continues to benefit from structural growth opportunities with fiscal 2017 earnings guidance of “broadly in line with FY16” reiterated. We maintain our above-consensus fiscal 2017 earnings forecast of AUD 2.14 billion, which if achieved, will be 4% higher than the record fiscal 2016 result. Despite guidance we see risk to the upside.In our opinion, prospects for further earnings growth are intact. The fiscal 2017 tax rate is guided to be broadly in line with the 30.8% reported for fiscal 2016. Our fiscal 2017 forecast tax rate of 31% is unchanged. Based on our unchanged AUD 89 fair value estimate, the stock is undervalued trading 8% below valuation.Analysts: David Ellis and Ravi Reddy

Macquarie on Track for a Solid Fiscal 2017 Result. AUD 89 FVE Unchanged