Insights

Here’s why these top brokers reckon the Magellan (ASX:MFG) share price is cheap

Could Magellan shares still be a buy today?
The post Here’s why these top brokers reckon the Magellan (ASX:MFG) share price is cheap appeared first on The Motley Fool Australia. –

The Magellan Financial Group Ltd (ASX: MFG) sahre price is having a pretty happy day this Friday. Magellan shares are, at the time of writing, trading at $33.55 each, up a healthy 4.48% so far today.

But if we put that in just a little bit of context, it doesn’t look quite as good as it might seem. It was only yesterday that Magellan, one of the ASX’s largest fund managers, hit a new 52-week low of $31.34 a share. That’s the lowest Magellan shares have been since early 2019.

This descent into these new lows seemed to have been sparked by Magellan’s latest funds under management (FUM) report. On Wednesday this week, Magellan announced that its FUM for the quarter ending 30 September (the first quarter of FY2022) came in at $113.3 billion.

That was a decline of roughly $600 million from where it stood at the start of the quarter. It also represented a fall of $4.7 billion from where Magellan’s FUM was at the end of August.

This obviously wasn’t good news for the company, and investors seemed to have reacted accordingly.

But now that Magellan shares are sitting just a few percentage points off of their new 52-week low, some investors might be wondering if this is a sitting bargain.

Well, we have some insights on that question today.

Could the Magellan share price be a buy today?

As my Fool colleague James covered yesterday, the Magellan share price is looking attractive to the broker Macquarie. Macquarie has retained an ‘outperform’ rating on Magellan shares, albeit with a reduced 12-month share price target of $38. That still implies a potential 12-month upside of close to 15%.

Although, as we covered yesterday, Macquarie is still worried that Magellan’s FUM will remain under pressure for at least the rest of FY22, it still thinks the shares are “too cheap to ignore” right now. Macquarie is also eyeing the possibility of a dividend yield of 7% or so in FY22.

Macquarie isn’t the only broker bullish on Magellan either. According to reporting in today’s Australian Financial Review (AFR), another leading broker sees an even more optimistic 70% upside for the company.

At the current Magellan share price of $33.4, this company has a market capitalisation of $6.19 billion, a price-to-earnings (P/E) ratio of 23.13 and a dividend yield of 6.32%.

The post Here’s why these top brokers reckon the Magellan (ASX:MFG) share price is cheap appeared first on The Motley Fool Australia.

Should you invest $1,000 in Magellan right now?

Before you consider Magellan, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Magellan wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why Fletcher Building, Magellan, Sezzle, & Starpharma are racing higher

Why A2 Milk, Magellan, Santos, & Whitehaven Coal shares are falling

Top brokers name 3 ASX shares to buy today

Why A2 Milk, CBA, Flight Centre, & Magellan’s shares are sinking

The Magellan (ASX:MFG) share price is in focus on $1.5 billion FUM outflow

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!