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.
Sector: Banks.
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).
