ONB Stock Forecast & Price Target

Old National Bancorp recently demonstrated a robust financial performance with core deposit balances increasing by 0.8% and net interest income rising by 32.8% sequentially to $514.8 million, significantly exceeding expectations. The company's net interest margin (NIM) also improved to 3.53%, reflecting a 26 basis points increase sequentially, showcasing the benefits arising from its recent merger. Furthermore, the total loan pipeline has expanded to $4.8 billion, driven primarily by a rise in commercial loan balances, indicating a strong growth trajectory and enhanced revenue generation potential.

Old National Bancorp faces several significant risks that contribute to a negative outlook on its stock, primarily centering around asset quality performance and net interest margin challenges. The company's Common Equity Tier 1 (CET1) ratio decreased by 88 basis points to 10.74%, indicating potential concerns regarding capital adequacy amid an uncertain economic environment. Additionally, the forecasts highlight the likelihood of failing to achieve expected merger benefits and a competitive return on equity, all of which may adversely impact future earnings and growth potential.