The Bank of Queensland Ltd (ASX: BOQ) share price has been having a tough time again in 2023.
Since the start of the year, the regional bank's shares have lost 6% of their value.
This means the Bank of Queensland share price is now down almost 25% since this time last year, as you can see on the chart below.
Image source: Getty Images
Where next for the Bank of Queensland share price?
Goldman Sachs has been running the rule over Bank of Queensland ahead of its half-year results release later this month.
And while the broker believes the Bank of Queensland share price has the potential to rise meaningfully from current levels, it isn't confident enough to recommend it as a buy.
According to the note, the broker has retained its neutral rating with a $7.21 price target. The latter implies potential upside of 11% over the next 12 months.
Goldman is also forecasting a fully franked 7.5% dividend yield in FY 2023, making the total potential return an even more attractive 18.5%.
What did the broker say?
Goldman has retained its neutral rating on the Bank of Queensland share price due largely to its belief that the bank will underperform peers with its net interest margin (NIM). It explained:
We are Neutral rated on BOQ given: despite valuation support, we believe its NIM leverage will ultimately underperform peers and its expenses will remain under pressure given the current inflationary environment and headwinds from running legacy systems along with building its new digital bank, which we expect could somewhat offset ME Bank synergies and restructuring benefits.
What about its results?
On 20 April, Goldman expects Bank of Queensland to release its half-year results and post a 7.3% decline in cash earnings to $244 million. This is notably lower than the consensus estimate of $271 million.
The broker expects this to lead to the regional bank paying a fully franked interim dividend of 24 cents per share. Once again, this is short of the consensus estimate of 25 cents per share.
