Wild Weather in North America Blasts Macquarie Profit Higher

Macquarie today guided to fiscal 2021 profit being up 5% to 10%, an upgrade from guidance for profit to be “slightly down” given less than two weeks ago. The turnaround owes to extreme winter weather in North America which has significantly increased client demand for the physical supply of gas and power. Macquarie generates income by connecting producers and consumers, and has a considerable energy and oil storage and trading business which benefits from higher prices. We have increased our earnings forecast toward the top-end of guidance, 14% above our prior forecast. However, the one-off uplift to earnings due to volatile commodity demand and prices has no bearing on our longer-term forecasts. Our AUD 125 fair value estimate is unchanged.