Tuesday, Keefe, Bruyette & Woods, a financial services firm, announced an increase in the price target for Old National Bancorp (NASDAQ: NASDAQ:ONB) shares, raising it to $28.00 from the previous $23.00. The firm has maintained its Outperform rating for the stock.
The adjustment in the price target reflects a positive view on the upcoming acquisition of Bremer Financial Corporation by Old National Bancorp. The analyst at Keefe, Bruyette & Woods noted the strategic and financial benefits of the proposed deal, stating that an already inexpensive stock has gained further appeal due to the significant accretion expected from the transaction.
The analyst also highlighted the strength of Old National Bancorp's balance sheet, describing it as "best in class." This assessment supports the firm's previous findings published in The Answer Key on May 30, 2024. The firm's confidence in Old National Bancorp is bolstered by these factors, leading to raised estimates and the new price target.
Old National Bancorp's proposed acquisition of Bremer Financial Corporation is seen as a strategic move that could enhance the company's market position. The deal's potential to create value for Old National Bancorp's shareholders has been recognized by the financial analyst community.
Keefe, Bruyette & Woods' reiterated Outperform rating indicates their expectation that Old National Bancorp's stock will perform better than the overall market in the near future. The firm's analysis suggests that the bank's operational and financial strategies are well-aligned with market opportunities.
In other recent news, Old National Bancorp has been making significant strides in their financial operations. The company recently expanded its stock offering, entering into an additional forward sale agreement with Citibank for an extra 2,857,143 shares of common stock. This follows an initial forward sale agreement for 19,047,619 shares. Moreover, Old National Bancorp reported steady third-quarter financial results for 2024, with a GAAP EPS of $0.44 and an adjusted EPS of $0.46, supported by a 10.1% annualized growth in core deposits and a 4.1% increase in commercial loans.
Old National Bancorp has also acquired Bremer Financial Corp, a privately held company based in St. Paul, Minnesota, in a deal valued at approximately $1.4 billion. This move is expected to significantly enhance Old National Bancorp's market position, especially in the Twin-Cities area. Piper Sandler, who maintained an Overweight rating for Old National Bancorp, has increased the stock price target following this acquisition.
These are recent developments that indicate Old National Bancorp's strategic approach towards growth and risk management. The company has expressed plans to rebuild capital quickly with the potential for share buybacks next year. These actions, along with the Bremer Financial Corp acquisition and the expanded stock offering, demonstrate Old National Bancorp's commitment to its strategic financial operations.
InvestingPro Insights
Recent data from InvestingPro adds weight to Keefe, Bruyette & Woods' positive outlook on Old National Bancorp (ONB). The company's stock has shown remarkable strength, with a significant 62.2% price total return over the past year. This performance aligns with the analyst's optimistic view and increased price target.
ONB's financial health appears robust, with a P/E ratio of 14.12, suggesting the stock may still be reasonably valued despite its recent gains. The company's profitability is also noteworthy, with an operating income margin of 42.86% for the last twelve months as of Q3 2024.
InvestingPro Tips highlight ONB's consistent dividend payments, having maintained them for 42 consecutive years. This track record of reliability may appeal to income-focused investors and aligns with the analyst's description of ONB's "best in class" balance sheet.
For readers seeking a deeper understanding of ONB's financial position and growth prospects, InvestingPro offers 11 additional tips, providing a comprehensive analysis to support investment decisions.
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