Is the Bendigo Bank share price in the buy zone following Monday’s sell-off?


Bendigo and Adelaide Bank Ltd (ASX: BEN) shares are continuing to be sold off on Tuesday after the horror day we saw yesterday for this ASX 200 bank share. The Bendigo Bank share price has slumped another painful 4.55% at the time of writing to $9.43 a share.

After the 8.35% loss we saw yesterday, Bendigo Bank shares have now lost a depressing 12% or so over just this week (and it’s only Tuesday). The catalyst for these falls was, of course, the full-year earnings report for FY 2022 that the bank dropped yesterday.

As we covered at the time, Bendigo Bank reported a 6.9% drop in statutory net profit after tax (NPAT) to $488.1 million. However, cash earnings after tax rose by 9.4% to $500.4 million, while total income was bumped by 0.4% to $1,709.9 million.

Bendigo Bank declared a fully franked final dividend of 26.5 cents per share. That’s the same as last year’s final dividend.

But clearly, investors haven’t been too impressed with what this ASX 200 bank share reported yesterday.

However, after these steep share price losses this week, could this be a buying opportunity for Bendigo Bank shares?

Well, one ASX broker isn’t as bullish as it was before these earnings came out. As my Fool colleague James covered earlier this month, ASX broker Goldman Sachs had a ‘buy’ rating on Bendigo Bank shares, with a 12-month share price target of $11.89 a share.

At the time, Goldman stated that Bendigo Bank “provides the best exposure of the banks to rising rates, given its overall higher exposure to deposit funding, and higher exposure to rate inert deposits”.

It also stated that:

Furthermore, we highlight that to date, BEN has exhibited better discipline than its regional peers on deposit repricing in the face of higher cash rates, which should also support its NIM performance.

Our assessment of mid-cycle losses has BEN’s exposures as one of the most conservative of the banks we cover, with an estimated over-the-cycle loss rate of just 15 bp, versus 22 bp on average for the major banks. This leaves it well-placed should the macro environment deteriorate more than what is currently implied by our forecasts.

However, yesterday’s earnings seem to have dented Goldman’s opinions. As we covered this morning, Goldman has come out and downgraded its 12-month share price target to $10.60. Even so, that still represents an upside of around 12% from the current share price.

At the current Bendigo and Adelaide Bank share price, this ASX 200 bank share has a market capitalisation of $5.36 billion, with a dividend yield of 5.6%.

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