MQG – Citi rates the stock as Sell

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Macquarie’s operational update brought an increase in FY18 profit guidance to "up approximately 10%" on FY17, led by annuity-style businesses, with capital markets businesses falling short of FY17. But consensus already had such a forecast, the broker notes.

Ironically, capital markets have underperformed due to low volatility. The broker has lifted its target to $79.50 from $77.50, still well below the trading price. The broker does not believe the impact of rising interest rates is factored into market valuation. Sell retained.

Sector: Diversified Financials.

Target price is $79.50.Current Price is $101.73. Difference: ($22.23) – (brackets indicate current price is over target). If MQG meets the Citi target it will return approximately -28% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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