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Webster Financial (WBS)
NYSE:WBS
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Webster Financial (WBS) AI Stock Analysis

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WBS

Webster Financial

(NYSE:WBS)

Rating:79Outperform
Price Target:
$65.00
â–²(7.94%Upside)
Webster Financial's strong financial performance, coupled with positive technical indicators and strategic corporate actions, contribute to an overall favorable outlook. Key strengths include robust profitability, effective cash flow management, and a solid market position. While minor challenges in operational efficiency and competitive pressures exist, the company's strategic initiatives and growth potential provide a positive investment case.
Positive Factors
Credit Trends
Credit trends were a highlight with nonperforming and commercial classified loans both decreasing, alongside a decline in net charge offs.
Earnings Performance
4Q24 earnings exceeded expectations, with operating EPS beating consensus due to higher net interest income and fees.
Loan Growth
Loan growth showed positive momentum with end of period balances increasing and originations accelerating across major segments.
Negative Factors
Asset Quality
Asset quality metrics deteriorated, as evidenced by an increase in nonperforming and commercial classified loans.

Webster Financial (WBS) vs. SPDR S&P 500 ETF (SPY)

Webster Financial Business Overview & Revenue Model

Company DescriptionWebster Financial Corporation is a leading regional bank holding company headquartered in Stamford, Connecticut. The company primarily operates through its subsidiary, Webster Bank, offering a range of financial services including personal banking, commercial banking, and wealth management. Webster Bank serves a diverse client base across the Northeast United States, providing products such as checking and savings accounts, loans, mortgages, and investment services. The company's commitment to customer service and community involvement underscores its position as a trusted financial partner.
How the Company Makes MoneyWebster Financial makes money primarily through the interest income generated from its lending activities, including personal loans, commercial loans, and mortgages. The bank earns interest on the loans and mortgages it provides to individuals and businesses, which constitutes a significant portion of its revenue. Additionally, Webster Financial generates non-interest income through fees and service charges associated with its banking services, including account maintenance fees, transaction fees, and wealth management advisory fees. The company also benefits from investments made with customer deposits, further contributing to its earnings. Strategic partnerships and community banking initiatives enhance its market presence and customer acquisition, supporting its overall revenue model.

Webster Financial Earnings Call Summary

Earnings Call Date:Jul 17, 2025
(Q2-2025)
|
% Change Since: 3.05%|
Next Earnings Date:Oct 16, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong financial performance with solid growth in loans and deposits, improved asset quality, and strategic expansions in healthcare and asset management. However, challenges remain with NIM pressure and a competitive deposit environment. Overall, the highlights significantly outweigh the lowlights.
Q2-2025 Updates
Positive Updates
Strong Financial Performance
Webster Financial achieved a return on tangible common equity of 18% and ROAA of nearly 1.3% with growth in loans and deposits over 1% linked quarter. Revenue grew 1.6% over the prior quarter.
Share Repurchase Authorization
The Board authorized an additional $700 million in share repurchases, and 1.5 million shares were bought back in the quarter.
Improvement in Asset Quality
Criticized commercial loans and non-accruals were down in the quarter, with a net charge-off ratio of 27 basis points, within the long-term normalized range.
Expansion in Healthcare Financial Services
The reconciliation bill's provisions are expected to significantly increase the addressable market for HSA Bank, estimating a potential deposit opportunity of $1 billion to $2.5 billion over the next 5 years.
Operational Realization of Joint Venture with Marathon
Webster moved $242 million of loans to held-for-sale in the second quarter, setting the stage for enhanced sponsor loan growth and fee revenue in 2026.
Technological Advancements
Successfully transitioned to a new cloud-native general ledger, marking a significant investment in operational efficiency.
Negative Updates
NIM Pressure
Net interest margin (NIM) decreased by 4 basis points to 3.44% due to seasonal deposit mix shift, higher cash balances, and slight organic spread compression.
Competitive Deposit Environment
Significant competition for deposits was noted, affecting the ability to move deposit costs down despite the expectation of two Fed rate cuts.
Challenges in Commercial Real Estate and Healthcare
45% of NPLs and 25% of classified loans were concentrated in CRE office and healthcare services, although these sectors are now below $1 billion.
Company Guidance
During Webster Financial Corporation's Second Quarter 2025 Earnings Call, the company reported a return on tangible common equity of 18% and a return on average assets (ROAA) of nearly 1.3%. Both loans and deposits grew over 1% from the previous quarter, contributing to an overall revenue increase of 1.6%. The common equity Tier 1 ratio improved, and the loan-to-deposit ratio remained stable. The Board authorized an additional $700 million in share repurchases, and the company repurchased 1.5 million shares during the quarter. Asset quality showed improvement with a net charge-off ratio of 27 basis points, within the long-term range of 25 to 35 basis points, and a decrease in criticized commercial loans and non-accruals. The company highlighted its strong capital position, diverse loan origination channels, and differentiated deposit profile, particularly within its Healthcare Financial Services segment. Webster anticipates that its asset management partnership with Marathon will enhance sponsor loan growth and drive fee revenue starting in 2026.

Webster Financial Financial Statement Overview

Summary
Webster Financial shows solid profitability with a net profit margin of 18.6% and a stable gross profit margin of 56.6%. Revenue growth is positive at 5.68%, but operational costs have increased as indicated by a declining EBIT margin. The balance sheet is strong with a low debt-to-equity ratio of 0.42, and cash flow management is robust with an operating cash flow to net income ratio of 1.61.
Income Statement
78
Positive
Webster Financial shows a stable performance with a Gross Profit Margin of 56.6% for TTM (Trailing-Twelve-Months), indicating efficient cost management. The Net Profit Margin is healthy at 18.6%, reflecting strong profitability. Revenue has grown by 5.68% compared to the previous year, showcasing positive growth. However, the EBIT Margin has slightly declined to 24.2%, which may indicate rising operational costs.
Balance Sheet
72
Positive
The company's Debt-to-Equity Ratio stands at 0.42, which is relatively low, suggesting prudent leverage management. Return on Equity is solid at 8.47%, indicating effective use of equity to generate income. The Equity Ratio of 11.46% showcases a balanced approach to asset financing, though there is room for strengthening the equity base to enhance financial stability.
Cash Flow
81
Very Positive
Webster Financial demonstrates robust cash flow management, with Operating Cash Flow to Net Income Ratio at 1.61, indicating strong cash generation relative to profits. The Free Cash Flow to Net Income Ratio is commendable at 1.56, reflecting effective capital expenditure management. While Free Cash Flow growth is slightly negative at -11.10%, the overall cash flow position remains healthy.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue4.19B4.17B3.94B2.72B1.26B1.29B
Gross Profit2.37B2.36B2.50B2.19B1.28B1.04B
EBITDA1.09B1.09B1.16B879.78M575.37M323.15M
Net Income779.30M768.71M867.84M644.28M408.86M220.62M
Balance Sheet
Total Assets80.28B79.03B74.95B71.28B34.92B32.59B
Cash, Cash Equivalents and Short-Term Investments2.52B2.08B10.68B8.73B4.70B3.59B
Total Debt3.90B3.36B3.87B7.69B1.39B1.88B
Total Liabilities71.08B69.89B66.26B63.22B31.48B29.36B
Stockholders Equity9.20B9.13B8.69B8.06B3.44B3.23B
Cash Flow
Free Cash Flow1.22B1.37B938.35M1.31B672.00M359.27M
Operating Cash Flow1.26B1.40B978.65M1.34B688.59M380.55M
Investing Cash Flow-3.26B-3.87B-2.60B-7.19B-2.41B-2.29B
Financing Cash Flow2.97B2.82B2.49B6.23B1.91B1.91B

Webster Financial Technical Analysis

Technical Analysis Sentiment
Positive
Last Price60.22
Price Trends
50DMA
54.91
Positive
100DMA
51.57
Positive
200DMA
53.58
Positive
Market Momentum
MACD
1.93
Negative
RSI
61.18
Neutral
STOCH
83.17
Negative
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 60.22 is above the 20-day moving average (MA) of 58.63, above the 50-day MA of 54.91, and above the 200-day MA of 53.58, indicating a bullish trend. The MACD of 1.93 indicates Negative momentum. The RSI at 61.18 is Neutral, neither overbought nor oversold. The STOCH value of 83.17 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WBS.

Webster Financial Risk Analysis

Webster Financial disclosed 47 risk factors in its most recent earnings report. Webster Financial reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Webster Financial Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$10.40B12.569.49%2.59%4.65%7.12%
78
Outperform
$8.70B15.0315.26%2.84%5.99%7.75%
76
Outperform
$8.76B12.8011.07%4.21%-7.80%15.43%
74
Outperform
$8.36B15.1216.36%1.70%14.15%17.71%
72
Outperform
$9.22B10.9912.58%1.81%7.06%14.94%
70
Outperform
$8.30B14.189.32%0.88%10.19%48.39%
61
Neutral
C$15.12B7.0623.28%5.39%33.61%-23.38%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
WBS
Webster Financial
60.22
13.08
27.75%
CMA
Comerica
67.48
17.15
34.08%
CBSH
Commerce Bancshares
61.77
1.61
2.68%
CFR
Cullen/Frost Bankers
135.35
21.11
18.48%
PNFP
Pinnacle Financial Partners
104.16
7.81
8.11%
WAL
Western Alliance
83.21
4.78
6.09%

Webster Financial Corporate Events

Executive/Board Changes
Webster Financial Announces Executive Resignation
Neutral
Jul 21, 2025

On July 18, 2025, Albert J. Wang announced his resignation as Executive Vice President and Chief Accounting Officer of Webster Financial Corporation and Webster Bank, effective September 2, 2025, to pursue another professional opportunity. Gregory S. Madar will assume the role of Interim Chief Accounting Officer starting September 3, 2025, while the company searches for a permanent replacement.

The most recent analyst rating on (WBS) stock is a Buy with a $66.00 price target. To see the full list of analyst forecasts on Webster Financial stock, see the WBS Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Webster Financial Reports Strong Q2 2025 Results
Positive
Jul 17, 2025

Webster Financial Corporation reported strong financial results for the second quarter of 2025, with net income applicable to common stockholders of $251.7 million, or $1.52 per diluted share, compared to $175.5 million, or $1.03 per diluted share, in the same quarter of 2024. The company experienced growth in revenue, loans, and deposits, with improved asset quality metrics and a lower provision for credit losses. The financial performance highlights Webster’s solid growth and strategic positioning, indicating a positive outlook for future business opportunities and shareholder returns.

The most recent analyst rating on (WBS) stock is a Buy with a $66.00 price target. To see the full list of analyst forecasts on Webster Financial stock, see the WBS Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy
Webster Financial Appoints New Board Member and CRO
Positive
Jul 1, 2025

On June 25, 2025, Webster Financial Corporation announced the appointment of Frederick J. Crawford to its Board of Directors, effective July 1, 2025, expanding the board from 12 to 13 members. Crawford, recognized as an independent director and financial expert, will serve on the Audit and Risk Committees. Additionally, Jason E. Schugel was appointed as Chief Risk Officer and Executive Vice President, effective July 14, 2025, succeeding Daniel Bley, who will retire but remain temporarily in an advisory role. Schugel brings extensive experience in risk management from his previous role at Ally Bank. These appointments are expected to enhance Webster’s strategic capabilities and governance as it continues to grow and navigate the regulatory landscape.

The most recent analyst rating on (WBS) stock is a Buy with a $66.00 price target. To see the full list of analyst forecasts on Webster Financial stock, see the WBS Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Webster Financial Concludes Successful Annual Stockholders Meeting
Neutral
May 23, 2025

On May 21, 2025, Webster Financial Corporation held its 2025 Annual Meeting of Stockholders, where 89.7% of shares were represented. During the meeting, stockholders elected twelve directors for one-year terms, approved executive compensation on a non-binding basis, and ratified KPMG LLP as the independent auditor for the fiscal year ending December 31, 2025.

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 18, 2025