The Australian Retail Bank of Queensland’s (AU:BOQ) share price demonstrated a weaker performance, lagging by around 20% YTD. Higher competition, shrinking margins, and fragile risk management fostered a pessimistic sentiment among investors, resulting in a decline in the share price.
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Falling Numbers
In its first-half earnings for 2023, the bank posted a huge 98% decline in profits from AU$212 million to just AU$4 million. This was mainly hit by a cash impairment worth AU$200 million and a provision of $60 million for the integrated risk program. The banking group also stated that although there was a margin uplift, it was partially offset by a 7% increase in expenses.
Analysts hold a cautious approach to the bank’s share price as interest rates erode margins and contribute to higher loan arrears.
24 days ago, Brendan Sproules from Citigroup confirmed his Hold rating on the stock, anticipating a modest hike of 5.12%.
Last month, UBS analyst John Storey reiterated his Sell rating on the stock, predicting a downside of 8.5% in the share price.
What is the Prediction for BOQ Stock?
According to TipRanks’ rating consensus, BOQ stock has a Hold rating based on a total of nine recommendations. This includes two Buy, four Hold, and three Sell ratings.
The average price target is AU$6.13, with an upside potential of almost 12% from the current trading level.
Conclusion
The BOQ share price has experienced a less-than-favorable start in 2023. The disappointing numbers for the first half made things worse. Analysts have rated the stock as Hold as they await the next set of results in October.
