The Bank of Queensland Ltd (ASX: BOQ) share price ran out of steam on Monday. The regional bank's shares ended the day almost 1% lower at $7.67.
Despite this, the Bank of Queensland share price is still up over 12% since this time last week.
Investors have been scrambling to buy the bank's shares since the release of its full year results last week.
Although those results were softer than the market was expecting, its exit net interest margin (NIM) caught the eye and got investors excited.
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Can the Bank of Queensland share price keep rising?
The good news is that the team at Citi believe there's still plenty of upside ahead for the Bank of Queensland share price.
According to a note, the broker has put a buy rating and $8.75 price target on the bank's shares. This implies potential upside of 14% for investors over the next 12 months.
And with Citi expecting a 58 cents per share fully franked dividend in FY 2023, which equates to a 7.5% yield, the total potential return stretches to over 21%.
Citi commented:
BOQ delivered FY22 cash earnings of $508m, ~2% below consensus estimates. However, despite the modest miss, the stock materially outperformed the index by ~1100bps. We think that this largely reflected commentary on rates leverage. In our view, consensus has been underestimating the extent of rates leverage across the sector, which coupled with a view that BOQ has less rates leverage than peers. This had left very modest NIM expectations for FY23.
Today, management dispelled these modest expectations, with bullish commentary on the exit NIM. While costs were a slight disappointment, proportionally they will be much less than revenue upgrades, and as a result we think consensus moves higher. We think BOQ's metrics in its strategy day look challenged, reflecting the abnormally low starting point for BDDs, an uncertain outlook for macro factors as well as execution risk associated with sizable M&A transactions.
