What Happened to the Bank of Queensland Ltd Share Price?
Shares in Bank of Queensland Ltd [ASX:BOQ] enjoyed a welcome pop today, outperforming a positive Aussie stock market to close up by 1.76%. After a torrid September for Bank of Queensland — alongside all of its banking peers — the stock has now recovered to be back in positive territory in 2014.
Why Did This Happen to BOQ Shares?
This price action shows the power of a respected analyst’s recommendation.
This morning the research team at Bank of America Merrill Lynch (BAML) upgraded its recommendation on Bank of Queensland Ltd to ‘buy’.
BAML pointed out that Bank of Queensland has underperformed its regional banking peer, Bendigo and Adelaide Bank Ltd [ASX:BEN], by 12% since March. They view this valuation disconnect as a buying opportunity for Bank of Queensland.
BAML believes that Bank of Queensland would be a net beneficiary if the government chooses to tighten its regulation of Australia’s big four banks.
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This, combined with a feeling that the company’s mortgage book should continue to grow, has underpinned the bounce in BOQ’s share price today.
What Now for Bank of Queensland Ltd?
Investing in a second-tier financial institution like Bank of Queensland is usually a riskier proposition than buying shares in the big four. But that extra risk can provide the potential for stronger investment returns…particularly if the company can meet the potential that BAML highlighted in today’s positive research report.
Cheers, Tim Dohrmann+
Small-Cap Analyst, Australian Small-Cap Investigator
Join Money Morning on Google+
The post Why Bank of Queensland Ltd Shares Bounced Today appeared first on Stock Market News, Finance and Investments | Money Morning Australia.
