Bank of Queensland Ltd (ASX: BOQ) shares have been having a torrid time in 2023.
Since the start of the year, the regional bank's shares have lost almost 20% of their value.
This leaves them trading at $5.56, which is just a stone's throw away from their 52-week low of $5.35.
Can Bank of Queensland shares get back above $6.00?
The good news for shareholders is that analysts at Goldman Sachs believe that fair value is meaningfully higher than current levels.
And while the broker isn't yet recommending the bank as a buy, its price target implies a double-digit return for investors.
According to a recent note out of the investment bank, its analysts have a neutral rating and $6.20 price target on Bank of Queensland's shares.
This is 11.5% higher than where they currently trade. And with Goldman forecasting fully franked dividend yields of over 7% through to FY 2025, the potential total return on offer is heading towards the 20% mark. Not bad for neutral!
Commenting on the bank, the broker said:
We are Neutral-rated on BOQ given: i) its higher exposure to housing and its more rate sensitive deposit base leaves it more exposed to the current industry-wide trends adversely impacting NIMs, ii) its expenses will likely remain under pressure given the current inflationary environment and headwinds from running legacy systems along with building its new digital bank, iii) while management has launched a material productivity initiative to address this, they did not discount the potential for further restructuring charges, and iv) our TP offers limited upside.
Goldman also laid out a few things that could make it more positive. These are "better-than-expected performance in housing, better expense management, ME Bank synergies above the top end guided range."
Though, it also warns of downside risks including "intense lending competition, margin pressure, deterioration in asset quality, investment spend above budget."
