Yesterday, we learnt that the Bank of Queensland Limited (ASX: BOQ) has had its proposed takeover of Members Equity Bank (ME Bank) approved by the Federal government. Back in February, BOQ had announced that it had entered into an agreement with ME Bank for a $1.325 all-cash acquisition. The deal couldn't go ahead until BOQ got the green light from the government. But now that the green light has been given, the deal is expected to go ahead on 1 July.
The Bank of Queensland share price is responding well today. BOQ shares are up 5.18% to $9.24 at the time of writing.
One broker who thinks that there might still be some upside left in the BOQ share price is the investment bank, Goldman Sachs. According to the Australian Financial Review (AFR) today, Goldman reckons this final approval from the government "unlocks a tailwind for growth that will help push the lender's corporate profits higher".
Here's some of what Goldman's research note stated:
ME Bank provides growth and synergy opportunities… We remain buy-rated on BOQ… [given] continued improvements in volume momentum, particularly in housing… [as well as] its funding mix, which will be positively leveraged to the current funding environment.
Goldman also thinks Bank of Queensland's net income will rise above $400 million in the 12 months to August 2021. That's before eventually hitting $478 million by the same period in 2023. It has raised its 12-month price target by 0.5% to $9.90 a share.
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About the Bank of Queensland share price
At the current Bank of Queensland share price, the company has a market capitalisation of $5.92 billion. It also has a trailing price-to-earnings (P/E) ratio of 38.48 and a trailing, fully franked dividend yield of 3.1%. BOQ shares are now up 22.6% year to date and 50.4% over the past 12 months. However, they remain down 8.2% over the past 5 years.
