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On Monday, Keefe, Bruyette & Woods analysts discussed the impact of the Russell Recon 2025 changes on the stocks of Old National Bancorp (NASDAQ:ONB) and South State Corporation (NASDAQ:NYSE:SSB). The updates followed the release of FTSE Russell’s preliminary list of additions and deletions to the Russell US indexes, announced after the market closed on Friday, May 23.
The analysts noted that Old National Bancorp (ONB) was expected to migrate within the Russell indexes due to significant merger and acquisition activities last year. However, it was confirmed that ONB will remain stationary for now. This stability led to notable short covering on Thursday, with ONB stock outperforming the KBW Bank Index (BKX) by 200 basis points. According to InvestingPro, ONB boasts a remarkable 43-year streak of consistent dividend payments and maintains a "GOOD" overall financial health score, suggesting strong operational stability.
In contrast, South State Corporation (SSB) might experience technical pressure due to its potential migration within the indexes. Despite this possible challenge, the analysts maintained a positive fundamental outlook for SSB. They suggested that any underperformance could present a buying opportunity for investors.
The analysts highlighted that the Recon day represents more of a volume event rather than a price event, with unique performance trends often driven by active funds utilizing liquidity to reposition. Historical trends indicated that banks added to the Russell 2000 have shown a -9.6% performance, while those deleted have seen a +2.3% performance.
Overall, the commentary from Keefe, Bruyette & Woods provides insights into the potential market dynamics and investor strategies surrounding the Russell Recon 2025 changes, particularly emphasizing the technical and fundamental aspects influencing ONB and SSB stocks.
In other recent news, Old National Bancorp announced the completion of its forward sale agreements, resulting in net proceeds of approximately $443.2 million. This financial transaction involved the sale of over 21 million shares, marking a significant event in the company’s fiscal management. Jefferies, a global investment banking firm, initiated coverage on Old National Bancorp with a Hold rating and set a price target of $24.00, noting the company’s potential to enhance net interest income. Meanwhile, Keefe, Bruyette & Woods (KBW) adjusted its outlook, reducing the price target from $28.00 to $26.00, while maintaining an Outperform rating due to the bank’s strong financial position.
Old National Bancorp also held its 2025 Annual Meeting of Shareholders, where all nominated directors were elected, and Deloitte & Touche LLP was ratified as the independent auditor for the fiscal year. The company declared a quarterly cash dividend of $0.14 per share on its common stock, along with dividends on its preferred stock. The recent acquisition of Bremer Financial Corporation is expected to influence Old National’s financial performance, with analysts observing how the merger will impact earnings and operational efficiency. These developments reflect Old National Bancorp’s ongoing efforts in strategic financial planning and shareholder engagement.
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