Old National Bancorp (ONB): Reassessing Valuation After Fed Rate Cut Fuels Regional Bank Rebound

Old National Bancorp (ONB) just caught a tailwind from the Federal Reserve’s latest 25 basis point rate cut, with shares climbing about 5% as investors rotated back into regional banks on easing expectations.

See our latest analysis for Old National Bancorp.

That Fed driven bounce comes on top of a solid run, with an approximately 10% 1 month share price return and a near 67% five year total shareholder return. This suggests momentum is gradually rebuilding around Old National’s earnings and risk profile.

If this Fed friendly backdrop has you rethinking your bank exposure, it can also be a good moment to discover fast growing stocks with high insider ownership for other potential opportunities on your radar.

Yet with Old National trading below analyst targets and at a steep discount to some intrinsic value estimates, is the market overlooking a regional bank with improving fundamentals, or already factoring in the next leg of earnings growth?

Most Popular Narrative Narrative: 10.9% Undervalued

With Old National last closing at $22.95 against a narrative fair value of $25.75, the story leans toward mispriced earnings power and future scale.

Strategic investment in digital banking infrastructure, highlighted by recent technology hires and ongoing upgrades, is enabling ONB to scale services efficiently, enhance client experience, and capitalize on the sector wide shift toward digital and data driven banking; this should drive greater noninterest income, improve net margins, and increase client retention over time.

Read the complete narrative.

Curious how robust fee growth, widening margins, and a lower future earnings multiple all combine into that upside case? The full narrative unpacks the entire playbook.

Result: Fair Value of $25.75 (UNDERVALUED)

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

However, tighter competition and Old National’s concentrated Midwest footprint could pressure loan growth and amplify any regional downturn, which may challenge today’s upside narrative.

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

Another Angle on Valuation

Look through a simple earnings lens and Old National screens as anything but cheap, trading on 15.2 times earnings versus 11.9 times for the broader US banks group and 12.7 times for peers, even though our fair ratio suggests the market could eventually settle closer to 18.2 times. Is that a valuation cushion or a complacency risk if growth stumbles?

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

Build Your Own Old National Bancorp Narrative

If this view does not fully align with your own, dive into the numbers yourself and craft a personalized thesis in minutes, Do it your way.

A great starting point for your Old National Bancorp research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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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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