The Bank of Queensland Limited (ASX: BOQ) share price is edging lower on Thursday and is now 0.61% in the red at $8.18.
ASX financial shares have had a rough trot these past 3 months. However, most, if not all, majors have begun to show signs of a recovery heading into the new year.
BOQ bounced off a low of $7.60 in early December after coming down hard off its previous highs. Since finding range, it is now rising as investors show support once again.
With these points in mind, we've gone to see what the analysts at leading investment banks are saying on the outlook for BOQ investors in 2022.
Is Bank of Queensland a buy?
Depending on who you ask, it could be. Certainly, the majority of brokers are bullish on the direction of the Bank of Queensland share price, with the consensus price target now sitting at $9.62.
Most of the commentary is centred on the bank's net interest margin (NIM). For instance, Jefferies says BOQ's NIM compression may be better than the market is pricing.
Jefferies notes the bank revised FY22 guidance at its AGM recently, baking in a 1% reduction in operating costs year on year. However, it did reiterate a 2% positive jaws ratio, which looks at core income relative to expenses in banks.
This could transpose to a 9 basis point contraction in NIM from the previous year, Jefferies reckons. It notes this is better than expected, alongside the 1% reduction in operating costs.
The broker revised its price target upwards by 13% to $8.50, but rates it as a hold right now.
Meanwhile, the team at Macquarie Group Ltd (ASX: MQG) is also bullish on the Bank of Queensland share price. It reckons the bank is absorbing sector-wide headwinds to margins better than its peers.
Also alluding to the bank's FY22 guidance update, the broker says the revision was "strong given the industry backdrop" in a recent note. It reiterated its outperform rating on the stock while valuing the company at $10 per share.
Goldman Sachs also hammered in the NIM thesis in BOQ's investment debate. It noted the bank has a suite of options to offset mortgage-related headwinds to NIMs.
It says BOQ can achieve this as its deposit book is more "rate sensitive", particularly given that it estimated FY22 NIM would decline steeper than previous guidance of 0.05–0.07%.
For these reasons it maintains a buy rating and reiterated its price target of $9.67 per share.
Finally, JP Morgan likes BOQ's prospects in 2022. It notes lending growth has shot out of the starting blocks already in FY22, offsetting the expected NIM decline.
It too has an overweight rating on the stock and values Bank of Queensland at $9.80 per share.
Out of the list of analysts provided by Bloomberg Intelligence, 73% of analysts covering Bank of Queensland have it as a buy whereas there is just 1 sell rating.
Bank of Queensland share price summary
The Bank of Queensland share price has lagged the major benchmark this past year, climbing just over 8% in the last 12 months.
In the past month, it has spiked around 6%.
