The Bank of Queensland Limited (ASX: BOQ) share price was a solid performer on Tuesday.
The regional bank's shares rose 1.5% to $8.90 following the release of a positive announcement.
This means the Bank of Queensland share price is now up 18% since the start of the year.
Why did the Bank of Queensland share price push higher?
Investors were buying the bank's shares after it announced that it expects to reduce its collective provision by $75 million.
Management advised that this is being driven primarily by Australia's improved economic outlook, leading to improvements in data quality relating to collateral.
The bank also advised that it continues to monitor the ongoing economic impacts resulting from COVID-19 and will assess its collective provision accordingly. This could mean further releases down the line if Australia's economy continues its recovery.
Is it too late to invest?
One leading broker that still sees a lot of value in the Bank of Queensland share price is Goldman Sachs.
This morning the broker retained its buy rating and lifted its price target slightly to $9.85.
Based on the current Bank of Queensland share price, this implies potential upside of 10.7% over the next 12 months. And if you include dividends, this stretches to approximately 15%.
What did the broker say?
Goldman has updated its estimates to reflect the collective provision release.
It explained: "We upgrade our FY21/22E/FY23E cash EPS by +13.1%/-0.7%/+2.5%, driven by i) the A$75 mn collective provision release resulting in lower BDDs, and ii) BOQ's better volume performance, particularly in housing."
"We remain Buy rated on BOQ reflecting: i) continued improvements in volume momentum, particularly in housing, ii) its funding mix, which will be positively leveraged to the current funding environment, iii) potential upside risk to BOQ's 'broadly flat' 2H21E sequential NIM guidance, and iv) our revised TP offering 17% [now 15%] total shareholder return over the next 12-months," it concluded.
