OSBC: Post-Earnings Pullback Will Shape Returns Amid Credit And Buyback Trends

Analysts have modestly increased their price target on Old Second Bancorp from $21.75 to approximately $22.92, citing what they see as an overdone post earnings selloff despite results and guidance tracking broadly in line with expectations.

Analyst Commentary

Bullish Takeaways

• Bullish analysts argue that the recent share price weakness has created an attractive entry point, with the revised target price implying upside from current trading levels.
• The reaffirmed Outperform stance reflects confidence that management can deliver on its guidance, supporting a valuation premium versus regional banking peers.
• Steady execution against consensus expectations, even in a volatile rate environment, is seen as evidence of a resilient business model and earnings profile.
• Analysts note that the modest increase in the price target signals continued belief in the bank's medium term growth trajectory and capacity to generate shareholder returns.

Bearish Takeaways

• Bearish analysts caution that the upside from the new target price is limited if loan growth or net interest margins soften more than expected.
• Some remain wary that the market may continue to discount the stock if there is any sign of execution slip, particularly on credit quality and cost control.
• There is concern that valuation could prove stretched if broader macro pressures weigh on regional banks, capping multiple expansion.
• A subset of cautious voices highlight that, while guidance matched consensus, the lack of a clear upside surprise may constrain near term re rating potential.

What's in the News

• Completed a share repurchase of 326,854 shares, or approximately 0.73% of shares outstanding, for $5.88 million under the buyback program announced on December 20, 2024 (company filing).
• Reported net charge offs of $5.1 million for the quarter ended September 30, 2025, highlighting some credit normalization in the loan portfolio (company results).
• Board of Directors declared a cash dividend of $0.07 per share on October 21, 2025, payable November 10, 2025 to shareholders of record as of October 31, 2025 (company press release).

Valuation Changes

• Fair Value has risen slightly from $21.75 to approximately $22.92 per share, reflecting a modest uplift in the intrinsic valuation estimate.
• Discount Rate has increased marginally from 6.78% to about 6.96%, implying a slightly higher required return and risk premium in the updated model.
• Revenue Growth has edged down slightly from roughly 8.22% to 8.13%, indicating a small tempering of top line growth expectations.
• Net Profit Margin has slipped marginally from about 39.49% to 39.37%, suggesting a very modest reduction in projected profitability levels.
• Future P/E has risen moderately from about 12.0x to 12.5x, signaling a somewhat higher valuation multiple applied to forward earnings.