NEW YORK ( TheStreet) -- Old National Bancorp (NYSE: ONB) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, expanding profit margins and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • OLD NATIONAL BANCORP has improved earnings per share by 38.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, OLD NATIONAL BANCORP increased its bottom line by earning $0.44 versus $0.18 in the prior year. This year, the market expects an improvement in earnings ($0.67 versus $0.44).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Commercial Banks industry average. The net income increased by 41.2% when compared to the same quarter one year prior, rising from $11.90 million to $16.80 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 23.3%. Since the same quarter one year prior, revenues rose by 17.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for OLD NATIONAL BANCORP is currently very high, coming in at 89.20%. It has increased significantly from the same period last year. Along with this, the net profit margin of 12.50% is above that of the industry average.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

Old National Bancorp operates as a holding company for Old National Bank, which provides financial services to individuals and commercial customers primarily in Indiana, eastern and southeastern Illinois, and central and western Kentucky. The company has a P/E ratio of 21.1, equal to the average banking industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Old has a market cap of $1.1 billion and is part of the financial sector and banking industry. Shares are down 2.7% year to date as of the close of trading on Tuesday.

You can view the full Old Ratings Report or get investment ideas from our investment research center.
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