ONB Stock Forecast & Price Target

Old National Bancorp is attractive because its softer 3Q NII/NIM appears to be a temporary reset rather than a structural issue, with fixed-rate loan and securities repricing, a granular low-cost deposit base, and a low-40% deposit beta supporting NIM expansion into 2027. The company also has strong organic growth drivers, including a $5.6B-$4.4B commercial pipeline, 6%-8% or mid-single-digit loan growth, robust fee income from wealth management and capital markets, and benign credit with NCOs around 25 bps and NPAs at 0.92% of loans. Combined with strong buybacks near $100mm per quarter, an 11.1% CET1 ratio, and valuation at 8.7x-9.2x 2027 EPS, the outlook points to ~10% to 10%+ 2027 EPS growth and high-teens ROTCE.

Old National Bancorp is viewed negatively because its recent results showed a PPNR miss driven by net interest income $13mm below forecast and fees $2mm below, only partly offset by expenses $7mm lower. NIM also weakened 2 bps q/q to 3.52%, as loan yields rose to 5.92% but IBD costs and total deposit costs climbed 8 bps to 2.31% and 1.79%, signaling persistent funding pressure. The outlook is further clouded by risks from slower loan, core deposit and fee growth, credit quality deterioration, higher operating expenses, and potential Basel III Endgame capital requirements that could restrain growth and returns.