Shares in Bank of Queensland Limited (ASX: BOQ) are inching higher on Tuesday and are currently trading 0.6% in the green at $8.38, taking their gains over the past fortnight close to 11%.
ASX financials are strengthening in March and are now well ahead of most sectors this year to date. The S&P/ASX 200 Financials Index (ASX: XFJ), which is up 1.1% today, has spiked more than 2% in the past month and is up 3% since January.
It is one of the only sectors to remain in the green across all major time frames, well ahead of the benchmark S&P/ASX 200 Index (ASX: XJO)'s return.
BOQ shares are front-running the financials index and are now trading 4% in the green this year to date, after bouncing from a low of $7.69 on 9 March.
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What's happening with BOQ?
Other than a buoyant financials sector, there's been nothing remarkable out of BOQ's camp that relates to movements in its share price.
Both the bank and the broad sector are now in a vertical uptrend that's backed by a strong macro-economic narrative where interest rates look set to rise in the foreseeable future.
JP Morgan remains bullish on BOQ and says the market might be under-appreciating its growth potential seeing its current valuation.
It mentioned that momentum is building due to improvements in its digital strategy. As a result "BOQ believes the premium it will need to pay in the future will be lower than what it has paid in the past," – a clear tailwind to margins, analysts said.
Luckily for the bank, it remains JP Morgan's preferred regional bank on grounds of valuation and the wind up from its digital transformation strategy.
Analysts at Morgans are also bullish on the stock's "exceptional value" that might be worth considering, it said in a recent note.
The broker rates BOQ as a buy and values the company at $11 per share, around 31% upside potential at the time of writing.
In a recent analysis, it appeared the sentiment was bullish, seeing as 73% of analysts covering the bank have it as buy right now on a consensus price target of $9.90.
Nevertheless, BOQ is trailing a number of the banking majors in 2022 but is starting to close the gap.
BOQ share price snapshot
The BOQ share price is around 1% in the red over these past 12 months and is now trading back in the green this year to date.
Things have levelled off recently, however, as shares are now down over the past month.
