BOQ – Algo Sell Signal

Bank of Queensland announced 1H19 cash earnings of $167m which is below the downgraded guidance the company provided in February and 8% below the same time last year.

The result continues to highlight the struggles the regional banks have in the current environment.

An interim dividend of $0.34 was declared, which is a reduction from 2018 levels.

The chart below shows the Algo Engine sell signals in BOQ, starting in early 2018 at $13.00. BOQ now trades sub $9.00 and is likely to continue lower.

 

Bendigo Bank – 1H19

Bendigo reported earnings slightly below market consensus.

1H19 cash profit came in at $220m, however, we continue to see challenging conditions for the regional banks.

BEN and BOQ both display lower high formations and are under Algo Engine sell signals.

 

AGM Reflects Headwinds For Bank of Queensland

Our ALGO engine has shown a sell signal for BOQ since August 31st at $11.50.

The share price got a boost at yesterday’s AGM trading up to $11.35 just after the FY18 NPAT data was released.

However, as the trading day progressed, the lower margins on the current loan book combined with large software write offs pressured the share price back below $11.00.

We still prefer the short side of BOQ with a downside target of $9.60.

Bank Of Queensland

ALGO Update: Stay Short Bank of Queensland

Our ALGO engine triggered a sell signal for BOQ on August 31st at $11.49.

Since then the share price has traded sideways to lower and has now broken a technical support level near $11.05.

BOQ will hold its AGM next Thursday, October 4th.

In addition to warnings about funding pressures and contracting margins, we also expect the bank to announce a $30 million restructuring charge during the meeting.

On balance, the combination of technical and fundamental weakness points to a return to the June lows near $9.60.

Bank of Queensland

ALGO Update: Stay Short Bank of Queensland

Shares of BoQ are trading lower for the third consecutive day and are now pressing initial support at $11.00 in early trade.

Our ALGO engine triggered a sell signal on August 28th at $11.28. The “lower high” pattern was referenced to the intra-day high of $12.00 posted on March 12th.

BoQ has been the focus of several recent downgrades ranging from “under-perform” to an outright “sell.”

The main concerns for the profitability of bank going forward are the weakening credit growth and higher offshore funding costs.

We see the next area of support near the $10.70 level, followed by the $9.60 low posted in mid-June.

Bank of Queensland

BOQ To Lift Key Lending Rates

BOQ has open the door for a full round of out-of-cycle rate hikes as the bank lifted its variable home loan rate and line of credit for both investors and owner-occupier loans.

Blaming rising funding costs, BOQ will raise both credit structures by 15 basis points effective July 2nd. 

With the RBA standing firm on rates until at least Q3 2019, we don’t expect BOQ to be the only  bank to snug rates higher on an out-of-cycle basis.

Our ALGO engine triggered a sell signal on BOQ on June 21st at $10.50. We maintain our negative outlook on the stock with a medium-term target near $9.40.

Bank of Queensland