On Wednesday, Old National Bancorp (NASDAQ:ONB) saw its price target increased to $22.00 from $19.00 by RBC Capital, while the firm maintained a Sector Perform rating on the stock. The adjustment follows the recap of the company's second-quarter results, which were notably influenced by the early quarter completion of the CapStar acquisition.
The bank's core trends were reported to be solid and in line with expectations. Old National Bancorp experienced strong organic loan growth and purchase accounting accretion, both contributing positively to the margin and spread revenues. Additionally, core fee and expense trends were deemed decent by RBC Capital.
Credit quality at Old National Bancorp remained stable and healthy, a reassuring signal for investors and analysts alike. The outlook for 2024 has been described as generally consistent, with only minor adjustments anticipated. This is expected to sustain stable and quality results for the company moving forward.
The RBC Capital analyst noted the bank's recent performance, stating, "We are recapping 2Q results. Reported results were impacted by the closing of the CapStar acquisition early in the quarter. At the core, trends appeared solid and relatively consistent with expectations. Strong organic loan growth and purchase accounting accretion benefited the margin and spread revenues, while core fee and expense trends appeared decent. Credit quality was stable and healthy."
The analyst concluded with an outlook for the bank, "The 2024 outlook was generally consistent with some minor adjustments and should continue to drive stable and quality results. Fine-tuning estimates." This suggests a careful analysis of the company's future performance based on current and expected trends.
InvestingPro Insights
Old National Bancorp (NASDAQ:ONB) has garnered attention following its second-quarter performance and the subsequent increase in its price target by RBC Capital. To provide further insight, we turn to InvestingPro for a deeper look into the company's financial health and market performance.
InvestingPro Data shows that Old National Bancorp currently has a market capitalization of $6.44 billion, with a Price/Earnings (P/E) ratio of 11.91 based on the last twelve months as of Q1 2024. This suggests a valuation that may be appealing to investors looking for reasonably priced earnings. Additionally, the company has a Price/Book ratio of 1.2, which could indicate that the stock is potentially undervalued compared to its book value.
When it comes to dividends, Old National Bancorp has a longstanding history of providing shareholder returns, maintaining dividend payments for an impressive 42 consecutive years. The dividend yield stands at 2.77%, with the last dividend having an ex-date of June 5, 2024.
InvestingPro Tips highlight that Old National Bancorp is trading near its 52-week high, with the price at 99.26% of this peak, which aligns with the stock's strong performance over the last month, quarter, and year. The one-month, three-month, and year-to-date price total returns are 20.18%, 22.74%, and 21.6%, respectively, indicating robust recent growth.
However, it's important to note that the Relative Strength Index (RSI) suggests the stock is currently in overbought territory, which could signal a potential pullback or leveling off in the near future. Moreover, the company suffers from weak gross profit margins, which investors should consider when evaluating the overall financial health of the company.
For those interested in a comprehensive analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/ONB. These tips can provide further guidance on Old National Bancorp's stock performance and future prospects. And to enhance your investment research, don't forget to use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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