Citi has increased its price target for Webster Financial (WBS, Financial) shares from $65 to $71, maintaining a Buy rating after assessing the company's second-quarter performance. This upward revision is attributed to a more favorable outlook on the firm’s loan growth and credit conditions.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 15 analysts, the average target price for Webster Financial Corp (WBS, Financial) is $66.60 with a high estimate of $77.00 and a low estimate of $58.00. The average target implies an upside of 10.91% from the current price of $60.05. More detailed estimate data can be found on the Webster Financial Corp (WBS) Forecast page.
Based on the consensus recommendation from 16 brokerage firms, Webster Financial Corp's (WBS, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Webster Financial Corp (WBS, Financial) in one year is $49.93, suggesting a downside of 16.85% from the current price of $60.05. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Webster Financial Corp (WBS) Summary page.
WBS Key Business Developments
Release Date: July 17, 2025
- Return on Tangible Common Equity: 18%
- Return on Assets (ROA): Nearly 1.3%
- Revenue Growth: 1.6% over the prior quarter
- Loan and Deposit Growth: Over 1% in the quarter
- Share Repurchases: Authorized an additional $700 million; repurchased 1.5 million shares
- Net Charge-Off Ratio: 27 basis points
- Total Assets: $82 billion, up $1.6 billion from last quarter
- Deposits: Increased by $739 million
- Loan Growth: $616 million or 1.2% link quarter
- Net Income to Common Shareholders: Up $31 million relative to the prior quarter
- Earnings Per Share (EPS): $1.52 versus $1.30 in the first quarter
- Net Interest Margin (NIM): 3.44%, down 4 basis points from the prior quarter
- Non-Interest Income: $95 million, up $3 million over the prior quarter
- Non-Interest Expense: $346 million, up $2.1 million link quarter
- Allowance for Loan Losses: $722 million or 1.35% of loans
- Tangible Book Value Per Share: $35.13, up over 3% from last quarter
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Webster Financial Corp (WBS, Financial) reported a solid return on tangible common equity of 18% and a return on assets of nearly 1.3% for the second quarter of 2025.
- The company achieved growth in both loans and deposits of over 1% in the quarter, with overall revenue increasing by 1.6% over the prior quarter.
- The Board authorized an additional $700 million in share repurchases, and 1.5 million shares were bought back in the quarter.
- Webster Financial Corp (WBS) has a strong capital position, with an increase in the common equity Tier 1 ratio and a stable loan-to-deposit ratio.
- The healthcare financial services segment, including HSA Bank, is expected to benefit from favorable provisions in the reconciliation bill, potentially increasing deposits by $1 billion to $2.5 billion over the next five years.
Negative Points
- The net interest margin (NIM) decreased by 4 basis points from the prior quarter to 3.44%, with expectations of further pressure in the second half of the year.
- Deposit costs increased by 3 basis points over the prior quarter, with significant competition in the deposit market.
- There is a potential impact from proposed tariffs, although Webster Financial Corp (WBS) does not have disproportionate exposure to the most affected industries.
- The allowance for credit losses increased by $9 million, primarily due to balance sheet growth.
- The company anticipates a modest impact on net interest income from a new debt issuance in the second half of the year.
