BOQ – Morgan Stanley rates the stock as Underweight

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Morgan Stanley trims second half margin forecasts, believing the bank has not re-priced enough to stem funding pressures and stabilise margins.

The broker expects a $30m restructuring charge to be announced at the results on October 4, while capital initiatives are contingent on the sale of St Andrews to Freedom Insurance. Regulatory and compliance spending continues to increase as well.

Underweight maintained. Target is reduced to $9.30 from $9.50. In-Line industry view retained.

Sector: Banks.

Target price is $9.30.Current Price is $11.38. Difference: ($2.08) – (brackets indicate current price is over target). If BOQ meets the Morgan Stanley target it will return approximately -22% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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