Australia | Jun 01 2006
By Rudi Filapek-Vandyck
Bank of Queensland’s (BOQ) share price has come off quite a bit since we published our feature story explaining why the shares had become a Sell in the eyes of the local investment expert community. A fact that hasn’t escaped banking analysts at Smith Barney Citigroup either.
Only two days ago, the colleagues at GSJB Were reiterated their Underperform/LT Hold recommendation, but at Citigroup the time is seen ripe for the first Buy rating for a while.
Citigroup has been an enthusiastic follower of the stand out among regional Australian banks, but the analysts add they have been struggling with the company’s share market valuation. Now that the price has come off circa 17% over the past few weeks, the broker has started to like BOQ shares again.
The operational momentum of Bank of Queensland over the past 18 months through the bank’s Owner-Managed Branch model has been impressive, the analysts say.
They expect management to come out with more positive surprises in the months ahead.
"With almost 100 branches ramping up to maturity over the next 3-4 years and the best leverage to the business credit cycle of any regional bank, we expect BOQ to continue to deliver", the analysts state this morning.
They have taken the opportunity to not only raise their recommendation to Buy, Medium Risk, but also increase their twelve month price target to $15.30 versus $14.60 previously. Something of a double boost to Bank of Queensland share holders.
Citigroup is the first one to place the shares on Buy. The rest of the broker community still rates the shares either Hold or Sell (lots of Sells).