ONB
Old National Bancorp
$23.94
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 6.8% below fair value
You pay
$23.94
Bear
$17.98
Fair
$25.69
Bull
$33.40
Bear
$17.98
-24.9%
ROTCE 9.0% → 1.00x TBV
Fair
$25.69
+7.3%
ROTCE 12.0% → 1.60x TBV
Bull
$33.40
+39.5%
ROTCE 13.8% → 1.96x TBV
Key Value Driver
ROTCE (12.0%) vs. cost of equity (9.0%)
Implied Market Multiple
1.66x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $27.17 from 22 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $25.69 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Dividend-based valuation: $6.63 (74% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly