ONB Stock Forecast & Price Target

Old National Bancorp is well positioned for improving profitability because softer 3Q NII/NIM appears temporary, with variable-rate loan repricing, fixed-rate asset roll-off, and a stable low-beta deposit base creating a clearer path to NIM expansion. Its fundamentals are also supported by mid-single-digit balance-sheet growth, a $4.4B commercial pipeline, strong fee income across wealth management and capital markets, and disciplined expense growth, which together help support about 10% 2027 EPS growth and ROTCE approaching 19% by YE27. Shareholder returns add further appeal, as strong buybacks near $100mm per quarter and a discounted 8.7x 2027E EPS valuation suggest the market is understating earnings power and capital generation.

Old National Bancorp is facing a weakening earnings backdrop as NIM slipped 2 bps q/q to 3.52%, below the 3.57% forecast, while higher funding costs outpaced asset yield improvement, with loan yields up only 4 bps to 5.92% against 8 bps rises in IBD costs to 2.31% and total deposit costs to 1.79%. The bank’s outlook is further pressured by multiple fundamental risks, including slower-than-expected loan, core deposit, and fee income growth, elevated operating expenses, and potential credit quality deterioration that could lift NCOs and LLP. A prolonged U.S. recession or tougher capital rules such as Basel III Endgame could also raise credit costs and capital requirements, limiting earnings growth and shareholder returns.