Is the market too optimistic on Bank of Queensland shares?

Bank of Queensland Ltd (ASX: BOQ) shares are marching higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed yesterday trading for $6.72. In afternoon trade on Tuesday, shares are swapping hands for $6.81 apiece, up 1.3%.

For some context, the ASX 200 is up 0.9% at this same time.

This sees the ASX 200 bank stock up 16.1% over six months or just about twice the 8.1% half-year gains posted by the benchmark index.

Bank of Queensland shares also trade on a 5.0% fully franked trailing dividend yield.

But after the strong run higher since July, Bell Potter Securities' Christopher Watt said it may be prudent for investors to take some gains off the table (courtesy of The Bull).

Time to sell Bank of Queensland shares?

"The bank delivered a better-than-expected fiscal year 2024 result, leading to a near term share price lift. Cost reduction initiatives are encouraging," said Watt, who has a sell recommendation on Bank of Queensland shares.

Pointing to the stock's strong half-year performance driven by those 2024 results, Watt noted:

However, the market's optimism may be short lived given the bank's ambitious revenue growth targets during the next two years and complex strategic transformation. The shares have risen from $5.92 on July 1 to trade at $6.665 on December 12.

Investors may want to consider cashing in some gains.

What's been happening with the ASX 200 bank stock?

In case you missed it, Bank of Queensland held its annual general meeting (AGM) earlier this month, on 3 December.

Commenting on the outlook for Bank of Queensland shares at the AGM, CEO Patrick Allaway said "We are transforming to a simpler specialist bank with a superior customer experience on our new banking platform and a more optimistic outlook for shareholder returns."

As for costs and revenue for FY 2025, Allaway said, "We are targeting broadly flat total cost growth in FY 2025 and an uplift in revenues from the growth in our business bank and the owner manager conversion in the second half."

And after 18 months in decline, Allaway said the bank managed to stabilise its net interest margin in the second half of FY 2024, in part by refraining from cutting residential mortgage rates to unprofitable levels.

"We again stood back from uneconomic home lending and prioritised economic return over growth," he said.

Bank of Queensland shares closed up 1.6% on the day.