BOQ bounced +3.5% on Monday, making it by far the best-performing bank on the day. However, despite delivering a better-than-expected earnings report in late April, the regional bank remains in the shadow of the “Big Four,” and abandoning the larger peers seems to be contrarian for the sake of it. The future headwinds for BOQ are clear, most notably declining Net Interest Margins, rising operating costs and their questionable ability to compete against the majors as technology becomes an ever important aspect in banking. Unfortunately, we feel BOQ is cheap for a reason, trading on a 0.6x Price/Book Value against a long-term average of 1.0x.
- We have reverted back to a neutral stance towards BOQ. If it cannot rally on good news, it is not for us.
MM is neutral towards BOQ
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