The Bank of Queensland Limited (ASX: BOQ) share price is testing its shareholders’ patience this year. Despite putting the pedal to the metal for the first three-quarters of the year — rising nearly 30% — shares in the 158-year-old bank are now only up 5.7% year-to-date.
For context, the S&P/ASX 200 Index (ASX: XJO) has handed out a gain of 9.1% (before dividends). An even more comparable comparison is the ASX financials sector. The overall sector has pulled a gain of more than 18% since the start of 2021, mostly thanks to the majority of the big four conjuring up 15% or more increases.
Nonetheless, as we get closer to crossing the threshold from one year to the next, it’s time to slide the Bank of Queensland share price under the microscope and get a sense of where it could be heading in 2022.
New year, same old bank
Many of us like to create New Year’s resolutions, though few follow through on the idealised ambitions. In 2022, shareholders will be watching that the bank follows through on its pre-commitments.
This follows a barrage of shareholder complaints regarding the Bank of Queensland’s lack of current technology at the annual general meeting (AGM) on Tuesday.
To which the bank admitted it had underinvested in during the past. However, chair Patrick Allaway gave shareholders the commitment that a digital transformation would be underway as part of a new strategy launched last year.
As part of the grilling for the bank’s outdated tech, Australian Shareholders’ Association’s Kelly Buchanan said:
For years and years, BoQ has been promising to get on top of its antiquated technology system. How can your long-suffering shareholders be confident, that with the acquisition of ME Bank, this time it’s different?
While current technology seems to be a problem for numerous major Australian banks, the Bank of Queensland has the added complexity of recently tieing up a substantial amount of money in the acquisition of ME Bank. That investment came to a total of $1.325 billion.
What are analysts expecting for the Bank of Queensland share price?
It appears brokers are optimistic about a good year for the Bank of Queensland share price. In fact, two brokers currently have price targets that are above the financial institution’s current valuation.
Firstly, the team at Citi has a buy rating on the bank, alongside a $10 price target. This would suggest a potential upside of 25% to the current Bank of Queensland share price.
Secondly, analysts at Goldman Sachs are expecting good things from the Aussie bank in 2022. The broker also has a buy rating and a $9.67 price target.
Finally, based on its latest earnings the Bank of Queensland share price is trading on a price-to-earnings (P/E) ratio of ~12.8 times. While this is above the industry average, investors could be paying a premium for the bank’s impressive growth between FY20 and FY21.