Analyst optimism puts fresh focus on Old National Bancorp (ONB)
Recent research updates from Barclays, Citigroup, Truist Securities, RBC Capital, and Stephens & Co. have put Old National Bancorp (ONB) back on investor radars, as consistent analyst optimism shapes current sentiment around the regional bank.
See our latest analysis for Old National Bancorp.
Old National Bancorp’s recent 3.3% 1 day share price return and 4.1% 7 day share price return to US$23.25 come after a solid 21.0% 1 year total shareholder return and an 88.0% 3 year total shareholder return. This suggests sentiment has been improving even as the 90 day share price return has been roughly flat.
If analyst optimism around ONB has you thinking about where else momentum might be building, it could be a good time to hunt for resilient financial names through our 19 top founder-led companies
With ONB trading at a discount to both analyst targets and one intrinsic value estimate, yet already showing strong multi year returns, you need to ask whether there is still a buying opportunity here or if the market is already pricing in future growth.
Most Popular Narrative: 15% Undervalued
Old National Bancorp's most followed narrative puts fair value at $27.36, above the last close at $23.25, framing a valuation gap built on earnings and margin expectations.
ONB's strong performance in expanding its fee-based businesses (wealth, mortgage, and capital markets) and well-controlled expenses, along with increasing organic noninterest income, are supported by the demographic shift of the aging U.S. population, which is likely to further boost demand for wealth management and trust services, generating higher recurring revenue and improving earnings stability.
Want to see what is behind that confidence in higher recurring earnings and wider margins over time? The narrative leans on compound revenue growth, rising profitability and a future earnings multiple that depends on those forecasts holding up.
Result: Fair Value of $27.36 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, that optimistic setup could be challenged if Old National’s commercial real estate exposure becomes problematic or if regional concentration leaves earnings vulnerable to local slowdowns.
Find out about the key risks to this Old National Bancorp narrative.
Another Angle on ONB's Valuation
Analysts see Old National Bancorp as about 15% undervalued compared with their $27.36 price target, yet the current P/E of 13.8x sits above both peer averages at 12.8x and the wider US Banks industry at 11.5x. That gap can point to either a quality premium or extra valuation risk, so which side do you think it sits on?
See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
Given the mix of optimism and caution in this article, it may be helpful to act promptly, review the numbers yourself, and decide where you stand by checking the 4 key rewards and 2 important warning signs.
Looking for more investment ideas?
If ONB has caught your attention, do not stop here. Use these filters to uncover fresh opportunities that might suit your risk tolerance and income goals.
- Target potential mispricings by scanning a focused set of value opportunities through the 64 high quality undervalued stocks
- Strengthen your income stream by reviewing higher yielding candidates via the 12 dividend fortresses
- Prioritise resilience by zeroing in on companies screened for sturdier financial footing using the solid balance sheet and fundamentals stocks screener (40 results)
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com