Old National Bancorp (ONB) Valuation Check After Strong First Quarter Earnings Jump

Old National Bancorp (ONB) drew investor attention after reporting first quarter net interest income of US$572.57 million and net income of US$233.67 million, along with US$32 million in net charge offs and updated share repurchase activity.

See our latest analysis for Old National Bancorp.

The first quarter update, including higher reported net interest income and net income alongside US$32 million of net charge offs and recent buyback activity, comes as the share price sits at US$23.78 with a 30 day share price return of 7.12%. Over longer horizons, the stock shows a 1 year total shareholder return of 15.09% and a 3 year total shareholder return of about 11x. However, the 90 day share price return of a 6.38% decline suggests momentum has recently cooled.

If this kind of earnings and capital management story has your attention, it can be useful to compare with other banks and financials that are already screened for quality and balance sheet strength, starting with the solid balance sheet and fundamentals stocks screener (44 results)

With stronger recent earnings, ongoing charge offs of US$32 million, and a share price that already reflects a 1 year total return of 15.09% along with a very large 3 year gain, is there still a buying opportunity here or is the market already pricing in future growth?

Most Popular Narrative: 15% Undervalued

Old National Bancorp's most followed narrative places fair value at about $27.91 per share, above the recent $23.78 close, and ties that gap to earnings and margin expectations under a 7.39% discount rate.

The recently closed Bremer Bank partnership, completed ahead of schedule, has significantly expanded ONB's balance sheet and capital position, supporting both current earnings momentum and future loan growth. This positions ONB to benefit from ongoing migration and economic strengthening in its Midwest/South footprint, driving long-term revenue and EPS growth.

Read the complete narrative.

Analysts behind this narrative are not just assuming higher profits. They are building in faster earnings growth, thicker margins, and a future earnings multiple that sits below what many regional peers currently trade on. Curious which specific revenue path and profitability mix they think can justify that fair value gap and the implied valuation reset.

Result: Fair Value of $27.91 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this depends on ONB managing its commercial real estate exposure and avoiding profitability that is weaker than modeled, which could quickly narrow any perceived valuation gap.

Find out about the key risks to this Old National Bancorp narrative.

Another View: What P/E Says About ONB

The analyst narrative leans on cash flow and earnings forecasts, but the current P/E ratio of 12.4x tells a different story. It sits above the US Banks industry at 11.4x and above peers at 11.1x, yet below ONB's own fair ratio of 15.2x. You are left to decide whether that gap signals extra risk or leftover opportunity.

See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

If this mix of earnings strength, valuation debate and risk checks leaves you unsure, look at the underlying metrics yourself and move quickly to frame your own stance. You can start with 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.

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