Webster Financial (WBS) AI Stock Analysis

• Market Cap: $11.63B
• Dividend Yield: 2.49%
• Average Volume (3M): 4.56M
• Price to Earnings (P/E): 12.2
• Beta (1Y): 1.31
• Revenue Growth: 4.78%
• EPS Growth: 21.68%
• Country: US
• Employees: 4,297
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 1.59
• Shares Outstanding: 161,236,080
• 10 Day Avg. Volume: 4,500,405
• 30 Day Avg. Volume: 4,560,148
• PEG Ratio: 0.29
• Price to Book (P/B): 1.06
• Price to Sales (P/S): 2.28
• P/FCF Ratio: 11.96
• Enterprise Value/Market Cap: 1.34
• Enterprise Value/Revenue: 3.52
• Enterprise Value/Gross Profit: 5.79
• Enterprise Value/Ebitda: 11.85
• 1Y Price Target: $74.54
• Price Target Upside: 3.34% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 16
• EPS Forecast (FY): 6.64
• Revenue Forecast (FY): $3.03B

• Rating: 74 Outperform
• Price Target: $81.00 ▲(12.30% Upside)
• Action: Reiterated Date: 02/28/26
• Date: Action: Reiterated 02/28/26

The score is driven primarily by solid financial performance (strong revenue/profitability and improved leverage) and supportive technical momentum. Valuation is reasonable with a modest dividend, while the earnings call reinforced steady growth, capital return, and improving credit. The pending Santander acquisition adds a positive catalyst, though cash-flow volatility and competitive deposit/expense pressures remain key watch items.

Positive Factors

Strong profitability and returns

Sustained high ROTCE and improving ROA reflect efficient use of capital and underlying earnings power. This level of profitability supports ongoing share repurchases, dividend capacity and internal investment, giving the bank durable capacity to fund growth and absorb shocks over the next several quarters.

HSA Bank deposit growth opportunity

A multi-year pipeline to add $1.0–2.5B of relatively sticky HSA deposits diversifies funding and builds low-cost, fee-generating relationships. Over 2–5 years this can lower funding costs and increase fee income, improving NII stability and deposit mix resilience.

Improved leverage and capital posture

Material deleveraging since 2022 and a CET1 ratio near management targets strengthen regulatory and financial flexibility. A healthier capital base supports measured organic growth, buybacks and M&A optionality while lowering tail risk from credit or rate shocks over the medium term.

Negative Factors

Volatile cash generation

A sharp FCF decline and low operating cash conversion make funding and reinvestment less predictable. This volatility constrains discretionary actions, increases sensitivity to one-off items and reduces the margin for error when credit stress or higher funding costs materialize over coming quarters.

Concentrated problem loan pools

Persisting concentrations in office and health-care lending (≈$1B) raise idiosyncratic credit risk that can require elevated reserves or charge-offs. These pockets may depress asset yields and increase capital volatility until resolution or runoff completes over multiple quarters.

Deposit competition and repricing

Sustained competitive pressure on deposits and a meaningful deposit beta imply rising funding costs as markets reprice. That dynamic constrains NIM durability and forces tighter loan pricing or margin compression unless offset by cheaper funding or higher-yielding asset mix over the medium term.

Webster Financial Business Overview & Revenue Model

Company Description

Webster Financial Corporation operates as the bank holding company for Webster Bank, National Association that provides a range of banking, investment, and financial services to individuals, families, and businesses in the United States. It operates through three segments: Commercial Banking, HSA Bank, and Retail Banking. The Commercial Banking segment provides lending, deposit, and cash management services; commercial and industrial lending and leasing, commercial real estate lending, equipment financing, and asset-based lending, as well as treasury and payment services; wealth management solutions to business owners, operators, and consumers; and trust, asset management, financial planning, insurance, retirement, and investment products. The HSA Bank segment offers health savings accounts, health reimbursement arrangements, flexible spending accounts, and commuter services that are distributed directly to employers and individual consumers, as well as through national and regional insurance carriers, consultants, and financial advisors. The Retail Banking segment provides deposit and fee-based services, residential mortgages, home equity lines, secured and unsecured loans, and credit cards to consumers. The company also offers online and mobile banking services. As of December 31, 2021, it operated 130 banking centers and 251 ATMs. The company was founded in 1935 and is headquartered in Stamford, Connecticut.

How the Company Makes Money

Webster Financial generates revenue primarily through interest income and non-interest income. Interest income is derived from loans and leases, which include personal loans, commercial loans, and mortgages. The interest earned on these financial products constitutes a significant portion of the company's earnings. Additionally, Webster Financial earns non-interest income from service fees, asset management fees, and trading activities. The bank may also benefit from strategic partnerships and collaborations with other financial institutions or technology firms that enhance its service offerings and expand its customer base. Overall, the company’s diversified revenue streams and focus on core banking activities contribute to its financial performance.

Webster Financial Financial Statement Overview

Summary

Strong multi-year revenue expansion and solid profitability (2025 net margin ~23%) with improved leverage (debt-to-equity ~0.45) and better returns (ROE ~10.6%). The main offset is cash-flow volatility, including a sharp free-cash-flow decline in 2025 and low operating cash flow relative to revenue.

Income Statement

Revenue expanded strongly over the period (from about $1.3B in 2020 to $4.4B in 2025), with continued growth in 2025. Profitability is solid for a regional bank, with 2025 net margin around 23% and operating profitability holding near the high-20% range. Net income also improved versus 2024. Offsetting these strengths, profitability and margin levels have not been perfectly consistent year-to-year (notably net income dipped in 2024 vs. 2023), and earlier years show more volatility in revenue growth.

Balance Sheet

The balance sheet shows a more conservative leverage profile than 2022: debt-to-equity improved from ~0.95 (2022) to ~0.45 (2025), while equity grew to about $9.5B alongside asset growth to about $84.1B. Returns on equity improved to ~10.6% in 2025, indicating better earnings power on the capital base. The key watch item is that leverage moved around over time (including a high point in 2022), so the trend is positive but not perfectly stable.

Cash Flow

Cash generation is positive, with free cash flow closely tracking net income across years (near 1.0x in 2025), suggesting earnings are translating into cash. However, free cash flow fell sharply in 2025 (down ~47% year over year) after a strong 2024, highlighting volatility. Operating cash flow relative to revenue is also low (roughly ~2% in 2025), which limits cash flexibility and makes results more sensitive to swings in operating cash generation.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	4.42B	4.17B	3.94B	2.72B	1.26B
Gross Profit	2.69B	2.36B	2.50B	2.19B	1.28B
EBITDA	1.26B	1.09B	1.16B	879.78M	575.37M
Net Income	1.00B	768.71M	867.84M	644.28M	408.86M
Balance Sheet
Total Assets	84.07B	79.03B	74.95B	71.28B	34.92B
Cash, Cash Equivalents and Short-Term Investments	18.35B	2.08B	10.68B	8.73B	4.70B
Total Debt	4.32B	3.36B	3.87B	7.69B	1.39B
Total Liabilities	74.58B	69.89B	66.26B	63.22B	31.48B
Stockholders Equity	9.49B	9.13B	8.69B	8.06B	3.44B
Cash Flow
Free Cash Flow	843.15M	1.37B	938.35M	1.31B	672.00M
Operating Cash Flow	843.15M	1.40B	978.65M	1.34B	688.59M
Investing Cash Flow	-107.25M	-3.87B	-2.60B	-7.19B	-2.41B
Financing Cash Flow	-1.05B	2.82B	2.49B	6.23B	1.91B

Webster Financial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 72.13
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WBS, the sentiment is Positive. The current price of 72.13 is above the 20-day moving average (MA) of 71.71, above the 50-day MA of 67.12, and above the 200-day MA of 59.40, indicating a bullish trend. The MACD of 1.84 indicates Positive momentum. The RSI at 59.12 is Neutral, neither overbought nor oversold. The STOCH value of 65.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WBS.

Webster Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SSB	75 Outperform	$9.68B	12.54	10.68%	2.38%	33.87%	12.26%
WBS	74 Outperform	$11.63B	12.22	10.65%	2.49%	4.78%	21.68%
WTFC	74 Outperform	$9.69B	12.63	12.11%	1.40%	3.58%	13.93%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
UMBF	65 Neutral	$8.82B	12.47	12.59%	1.37%	38.81%	10.38%
WAL	65 Neutral	$8.83B	9.20	13.50%	1.80%	6.30%	25.28%

Webster Financial Corporate Events

Webster Financial to Be Acquired by Banco Santander

On February 3, 2026, Webster Financial Corporation entered into a transaction agreement under which Banco Santander will acquire Webster through a two-step structure: Webster will first merge into a Virginia-incorporated wholly owned Webster subsidiary, and immediately afterward Banco Santander will acquire all shares of that subsidiary via a statutory share exchange. At the merger effective time, Webster common shares will convert one-for-one into shares of the subsidiary, and Webster’s Series F and Series G preferred shares will convert into equivalent preferred shares of the subsidiary; at the subsequent exchange effective time, each subsidiary common share will be exchanged for 2.0548 Banco Santander ordinary shares (or ADSs) plus $48.75 in cash, and a comprehensive equity-award conversion and vesting framework will transition Webster’s stock-based compensation into Banco Santander-linked awards. The deal, unanimously approved by the boards of Webster, Banco Santander and the subsidiary, is subject to a wide array of shareholder, regulatory, listing and legal conditions, includes customary covenants such as non-solicitation by Webster and best-efforts commitments to obtain approvals, and provides for a $489 million termination fee payable by Webster under specified change-of-control or competing-bid scenarios, underscoring both the strategic significance of the acquisition and the protections negotiated for Banco Santander and other stakeholders.

The most recent analyst rating on (WBS) stock is a Hold with a $75.00 price target. To see the full list of analyst forecasts on Webster Financial stock, see the WBS Stock Forecast page.

Webster Financial to be acquired by Banco Santander

On February 3, 2026, Webster Financial Corporation announced it has entered into a definitive merger agreement under which Spain-based Banco Santander will acquire Webster in a cash-and-stock deal valued at approximately $12.3 billion, based on Santander’s February 2, 2026 closing price. Webster shareholders are to receive $48.75 in cash plus 2.0548 Santander American Depositary Shares per Webster share, implying total consideration of $75.59 per share, a 16% premium to Webster’s 10-day volume-weighted average price and more than twice its fourth-quarter 2025 tangible book value per share. The transaction, unanimously approved by Webster’s board and Santander’s relevant governing bodies, is expected to create a top-10 retail and commercial bank by assets nationwide and a top-five institution by deposits in the U.S. Northeast, with Webster to become a wholly owned subsidiary of Santander and its operations integrated into Santander Bank N.A. Leadership continuity is planned, with Webster CEO John R. Ciulla to become CEO of Santander Bank N.A., President and COO Luis Massiani to serve as COO of both Santander Holdings USA and Santander Bank N.A., and Webster’s Stamford headquarters designated as a core corporate office for the combined U.S. franchise. Subject to customary regulatory and shareholder approvals in the U.S. and EU, the deal is expected to close in the second half of 2026 and is positioned as strategically significant for Santander’s U.S. expansion while offering Webster shareholders a mix of immediate cash value and ongoing participation in the enlarged group’s future performance.

The most recent analyst rating on (WBS) stock is a Buy with a $75.00 price target. To see the full list of analyst forecasts on Webster Financial stock, see the WBS Stock Forecast page.

Webster Financial Posts Strong Fourth-Quarter 2025 Results

On January 23, 2026, Webster Financial reported strong fourth-quarter 2025 results, posting net income applicable to common stockholders of $248.7 million, or $1.55 per diluted share, up from $171.8 million, or $1.01 per share, a year earlier, with adjusted EPS rising to $1.59 from $1.43. Revenue reached $746.2 million, supported by growth in loans and leases to $56.6 billion and deposits to $68.8 billion, while net interest income increased year-on-year despite a modest compression in net interest margin to 3.35%. Credit quality metrics remained stable, with provision for credit losses down from a year ago and non-performing loans holding at 0.88% of total loans, as the allowance for credit losses covered 144% of non-performing loans. Capital and profitability indicators were robust, with a return on average tangible common equity of 17.10%, a common equity tier 1 ratio of 11.22%, and higher book and tangible book value per share, even as Webster absorbed a $20 million charitable contribution, technology and human capital investments, and other one-time items while also repurchasing 3.6 million shares, underscoring management’s confidence in the bank’s financial strength and its scale-building strategy in its 90th anniversary year.

The most recent analyst rating on (WBS) stock is a Buy with a $71.00 price target. To see the full list of analyst forecasts on Webster Financial stock, see the WBS Stock Forecast page.

Webster Financial Appoints New Chief Accounting Officer

On January 6, 2026, Webster Financial Corporation appointed Kristen Antonopoulos as Chief Accounting Officer, replacing Gregory S. Madar in that role while he continues as Senior Managing Director, Corporate Controller of Webster Bank. Antonopoulos brings more than 20 years of finance and accounting experience, including nearly two decades at American Express, and will join Webster’s executive compensation and benefits programs under standard corporate agreements that include change-in-control and non-competition provisions, underscoring the company’s focus on strengthening its senior financial leadership and governance framework.

The most recent analyst rating on (WBS) stock is a Buy with a $72.00 price target. To see the full list of analyst forecasts on Webster Financial stock, see the WBS Stock Forecast page.