ONB Stock Forecast & Price Target

Old National Bancorp has demonstrated robust financial growth, with core deposit balances increasing by 0.8% and net interest income rising by 32.8% sequentially to $514.8 million, indicative of strong operational performance. The net interest margin also improved notably, increasing 26 basis points both sequentially and year-over-year to reach 3.53%, driven by the benefits of the recent merger. Furthermore, the total loan pipeline has expanded significantly to $4.8 billion from the previous $3.4 billion, primarily fueled by higher commercial loan balances, which collectively support a positive outlook for the company's future financial performance.

Old National Bancorp faces multiple risks that contribute to a negative outlook, including potential deterioration in asset quality, which could adversely affect earnings and capital. The company's common equity tier 1 (CET1) ratio has decreased by 88 basis points to 10.74%, signifying a weakening in capitalization that may hinder growth prospects. Furthermore, challenges in managing net interest margins and leveraging expected merger benefits could significantly impact the overall financial performance, with a downside scenario suggesting a potential stock value of $14 amid a challenging macroeconomic environment.