The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price is edging higher on Wednesday, currently fetching $10.64 apiece. That's up 0.85% on the day so far.
As the market continues digesting a wave of macroeconomic pressures, bank stocks, such as Bendigo Bank and the likes, have been net-gainers in 2022.
Momentum behind the sector has helped the bank secure a 17% gain this year to date, reversing a difficult period of returns in 2021.
More brokers are constructive on Bendigo…
Analysts at Bloomberg Intelligence reckon that Bendigo is well positioned to increase profitability amid its recent portfolio management activities.
Bloomberg's Matt Ingram and Jack Baxter wrote:
Bendigo and Adelaide's ROE [return on equity] may remain higher than its 7% five-year average despite its 'last in town' positioning, due to efficiency gains and lower-than-peer funding costs from its 500-plus branch network.
Returns may stay below larger peers as a result of sector-low loans and deposits per branch, which curb branch revenues.
The 500-plus branch network could additionally help Bendigo's return on assets (ROA) scoring, they said, and also "facilitates low-cost deposit gathering, bringing down funding costs to 0.4% vs. peers' 0.6% average".
Analysts at Macquarie are also constructive on the banking sector and rate Bendigo a buy on an $11 per share valuation.
Near-term catalysts might be the kind of tailwind that players like Bendigo need, they said, noting that the outlook on funding costs also seems brighter.
"While we continue to see risks to FY 2023 expectations with deposit costs starting to rise, banks appear in the sweet spot in the short term," they wrote.
Yet sentiment is still mixed
Whilst around 36% of analysts covering the bank have it rated as buy, there's still around 64% of coverage that rates it a hold, according to Bloomberg data.
The number of buy calls has crept upwards in the past two years though and the consensus of analyst estimates has the bank rated at $10.44 per share.
Drawing inferences from that data suggests that sentiment is still mixed on where the Bendigo and Adelaide Bank share price will head next.
In the last 12 months, the Bendigo and Adelaide bank share price has climbed 3.6%.
