BOQ made fresh 2-year lows yesterday as the local regional bank followed US names lower, the stock hasn’t been helped by this month’s 1H23 result which showed cash earnings of $256m for the half below consensus while the 20c dividend was lower than the 24c analysts expected. The result felt like a ‘clearing of the decks’ under newly appointed Managing Director Patrick Allaway, who was previously the Chair. BOQ is undoubtedly cheap, and its balance sheet is in ok shape, they just need to sort out their digital capabilities, reduce the costs associated with serving customers and of course convince investors that it shouldn’t remain in the too-hard basket.
- Trading on 8.25x, BOQ is very cheap versus its 5-year average PE, it’s on just 0.6x book value and is yielding 7.6% fully franked – the elastic band is stretching but downside momentum is strong.
MM is patiently still neutral towards BOQ
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