Bank of Queensland Ltd (ASX: BOQ) shares have fallen further into the red on Tuesday morning. At the time of writing, the shares are down around 1% to a two-year low of $5.94 a piece.
The latest decline means the shares are now around 10% lower year to date and just over 26% lower than 12 months ago.
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What dragged the share price to a multi-year low?
Australian bank shares have generally softened recently as investors reassess valuations, future credit growth, and earnings prospects.
Banks across the sector are facing tighter net interest margins thanks to strong industry competition for mortgages.
The decline in Bank of Queensland shares accelerated after the bank posted a weaker-than-expected first-half FY26 result in April and flagged tougher conditions for the remainder of the financial year.
The bank's revenue increased 4% over the six-month period to the 28th of February, but the growth didn't translate into profit.
Statutory NPAT was down 20% for the period, and cash earnings after tax fell 4%.
The main pressure point was costs. Operating expenses climbed 6%, driven by inflation, ongoing digital transformation, and continued investment in its business banking division.
Investors reacted negatively, and analysts quickly moved to revise their outlooks following the announcement.
What do brokers think about Bank of Queensland shares?
Market Index data shows the majority of brokers have a sell rating on the shares. But after the latest share price fall, the average broker target price of $6.14 implies around a 2% upside at the time of writing.
TradingView data shows a similar trend. Out of 15 analysts, seven have a sell or strong sell rating, and six have a hold rating. Only two have a buy rating on Bank of Queensland shares.
The average $6.12 target price implies a potential 1.5% upside at the time of writing. Meanwhile, some think the shares could climb by around 23% to $7.39, while others think they could crash by 24% to just $4.60 over the next 12 months.
The team at Morgans is bullish on Bank of Queensland shares. The broker said the bank's first-half earnings were lower than the previous period but still came in 4% ahead of Morgans' forecast. The broker upgraded its rating to accumulate from hold and sees potential for the share price to lift to $7.39.
Macquarie recently confirmed its sell rating on Bank of Queensland shares with a price target of $5.25. The broker cited persistent margin pressures, sub-scale operations, and continued market share losses amid a competitive market.
