On Wednesday, RBC Capital Markets adjusted its price target for Old National Bancorp (NASDAQ:ONB) shares, increasing it to $19.00 up from the previous $18.00. The firm maintained its Sector Perform rating on the stock. This change follows a review of the company's first-quarter results, which showed core trends remaining relatively stable and meeting expectations.
The bank's net interest margin (NIM) and spread revenues faced challenges in the first quarter, but management conveyed a positive outlook, indicating that these trends may have reached their lowest point.
This suggests potential stability or improvement in the upcoming periods. Additionally, while non-performing assets (NPAs) did see an uptick, overall credit trends were deemed manageable by the firm.
RBC Capital's assessment also included an evaluation of Old National Bancorp's updated outlook for 2024. The firm found the company's projections to be consistent and achievable, which could contribute to stable and high-quality results in the future. This outlook is supported by the bank's recent performance and management's expectations.
The analyst at RBC Capital provided insights on the bank's performance and future projections, stating, "Fine-tuning estimates." This implies slight adjustments to their financial forecasts for Old National Bancorp based on the recent quarter's results and the bank's guidance for the year ahead.
InvestingPro Insights
Old National Bancorp (NASDAQ:ONB) presents a mixed financial landscape according to recent InvestingPro data. The bank's market capitalization stands at a solid $4.83 billion, with an attractive price-to-earnings (P/E) ratio of 8.45, which is even more appealing when considering the adjusted P/E ratio for the last twelve months as of Q1 2024, at 8.96. This low P/E ratio, in relation to near-term earnings growth, signals that the stock may be undervalued, especially when factoring in the PEG ratio of 0.29 for the same period, which suggests the potential for growth at a reasonable price.
However, it's not all smooth sailing; the company's revenue has experienced a decline of 5.0% over the last twelve months as of Q1 2024. This is coupled with a slight decrease in the quarterly revenue growth rate at -5.42% for Q1 2024. Despite these challenges, Old National Bancorp has maintained a strong dividend yield of 3.4%, continuing its impressive streak of dividend payments for 42 consecutive years, which is a testament to its commitment to shareholder returns.
Investors considering Old National Bancorp will find additional insights on InvestingPro, which includes a total of 5 InvestingPro Tips for a more comprehensive analysis. These tips highlight areas such as the company's weak gross profit margins and the prediction from analysts that the company will remain profitable this year, reaffirming the bank's financial health as indicated by a profitable last twelve months. Interested readers can take advantage of a special offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription for more in-depth investment analysis.
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