Why Old National Bancorp (ONB) is on investors’ radar today

Old National Bancorp (ONB) has drawn fresh attention after recent trading left the stock with a year to date gain of 3.9% and a 1 year total return of 6.5%, despite softer recent returns.

Recent trading has been softer, with the share price down 2.94% over the last day and 4.60% over the past week. However, the 3 year total shareholder return of 96.69% and 5 year total shareholder return of 41.32% indicate strong longer term momentum.

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With Old National trading at $23.44 and sitting at what appears to be a sizeable discount to both some analyst targets and certain intrinsic value estimates, the key question is simple: is this a buying opportunity, or is future growth already priced in?

Most Popular Narrative: 16% Undervalued

Old National Bancorp's most followed narrative points to a fair value of $27.91, which sits above the recent close at $23.44 and anchors a more optimistic long term view.

Successful integration and synergy realization from acquisitions (specifically, the Bremer merger and retention of CRE loans previously planned for sale) is unlocking operational efficiencies and margin expansion, contributing to improved return on equity and tangible book value per share. These are metrics that may be underappreciated in the current valuation.

Curious what sits behind that higher fair value? Analysts are baking in faster earnings growth, wider margins, and a future profit multiple that assumes steady execution. The narrative spells out the full earnings path, the discount rate, and the valuation bridge from today’s price to that target.

Based on this narrative, Old National is viewed as trading at a sizeable discount to its modeled fair value, with a 7.39% discount rate and analyst assumptions on revenue, margins and earnings driving the gap.

Result: Fair Value of $27.91 (UNDERVALUED)

However, this hinges on a few key assumptions, and setbacks in Old National's commercial real estate exposure or slower than expected loan growth could quickly challenge that upbeat narrative.

Another Angle on Valuation

Analysts see Old National as 16% below their $27.91 target, yet the current P/E of 12.6x sits above the US Banks industry at 11.3x and peers at 10.9x, and below an estimated fair ratio of 15.2x. That mix of premium and headroom raises a simple question: is the stock cheap or just less expensive than it could be?

To see how this P/E gap could close over time and what it might mean for upside or downside if sentiment shifts, take a closer look at the valuation breakdown, including the fair ratio context, in the See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With sentiment leaning cautiously positive, this is a good moment to move quickly, review the key data points yourself, and shape your own view using the 4 key rewards.

Looking for more investment ideas?

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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.