Macquarie continues to expect regional banks to benefit from mortgage re-pricing and an improved funding environment. The broker believes Bank of Queensland’s recent re-rating more than captures the upside.
The broker also notes that slowing credit growth and potential longer-term headwinds to mortgage profitability do not bode well for the bank in the medium term.
Macquarie downgrades to Underperform from Outperform. Target unchanged at $12.50.
Target price is $12.50.Current Price is $12.91. Difference: ($0.41) – (brackets indicate current price is over target). If BOQ meets the Macquarie target it will return approximately -3% (excluding dividends, fees and charges – negative figures indicate an expected loss).