Analyst Manan Gosalia from Morgan Stanley maintained a Hold rating on Webster Financial and keeping the price target at $64.00.
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Manan Gosalia has given his Hold rating due to a combination of factors influencing Webster Financial’s performance. The company’s credit metrics showed improvement in the second quarter, with nonperforming and commercial classified loans decreasing, and net charge-offs declining. This positive shift in credit quality, which had been a significant risk, has increased confidence in its improvement trajectory.
Additionally, Webster Financial’s net interest income guidance remains within reach, supported by better-than-expected loan growth. Despite these positive developments, the net interest margin is projected to decline slightly due to higher cash levels and increased deposit costs. The new tax law also provides a benefit by expanding access to Health Savings accounts, contributing to deposit growth. These factors collectively support the Hold rating, as they indicate stability but not enough to warrant a more aggressive rating change.
WBS’s price has also changed slightly for the past six months – from $59.670 to $60.050, which is a 0.64% increase.