even the most bearish are reporting a profit

John Durie in the australian has reported that even the most bearish analysts have MQG making a profit albeit one 44% below expectations.

"The naysayers have said for years that Macquarie would suffer reputational damage from the funds, which account for just 20 per cent of its business, and deals such as Connect East. While the risk remains, the case is yet to be proved.

Macquarie is also rapidly exiting any capital-intensive business that puts it at a competitive disadvantage to the big banks. Mortgages and margin lending are two that are gone and its real estate assets are being wound back. Its treasury operations are reportedly doing well and for the last half at least its equities and advisory businesses have held their own. Macquarie is actually expanding and has added staff in the last half. It now has more than 13,700 people, up from 13,000 in March. It is targeting people from fallen rivals such as ABN AMRO in Sweden and Bear Stearns in the Middle East.

The group has some $3 billion in excess liquidity and even the most bearish analysts are reporting a profit, albeit one 44 per cent below the levels of a year ago. Moore's focus, then, is to work smarter and steer clear of competing against the banks for capital. "

perhaps this most bearish analyst is Huntley

here is what he says............

"We are not looking to single out MQG in a bearish way but realistically it is better to be on the conservative side in the current environment.


Taking a big stick we reduce our FY09 NPAT estimate from $1.45bn to $1.05bn. We will get guidance from the mid-November interim results and will be pleasantly surprised with an NPAT above $600m – a 43% decline from 1H08 NPAT of $1.06bn.


Inflating weighted average shares with all options on issue despite being well out of the money – added conservatism – FY09 EPS is 313.4¢ using 335m shares. We then assume no improvement in FY10.


We believe this is an extremely conservative approach. Fair value under this scenario – an apparent worse case scenario - falls from $73.40 to $47.00. Price triggers adjust accordingly. Despite what appears to be an ultra conservative view MQG remains in the positive recommendation zone which provides some degree of comfort."


huntley has MQG as a BUY up to $34.45