A largely pre-announced result was largely in-line with Morgans estimates at all levels. A fully franked interim dividend of 17cps was declared.
The broker increases cash EPS forecasts by 8.9% and 8.1% for FY22 and FY23, respectively, largely due to higher home loan balance forecasts and lower credit impairment charge forecasts. The Add rating is unchanged and the target is increased to $10.50 from $10.
With the macroeconomic and asset quality outlook improving, the analyst believes provisioning is looking increasingly conservative and sees potential for provision release in the second half FY21 and FY22.
Target price is $10.50.Current Price is $8.83. Difference: $1.67 – (brackets indicate current price is over target). If BOQ meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges – negative figures indicate an expected loss).