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Webster Financial
(NYSE:WBS)
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Rating:75Outperform
Price Target:
$84.00
â–²(14.49% Upside)
Action:Reiterated
Date:06/17/26
WBS scores well primarily on solid financial performance (healthy profitability, steady ROE, and strong cash conversion) and constructive technical trend signals. Valuation is also supportive (P/E ~11.6 and ~2.15% yield). The main offset is event risk tied to the Santander acquisition—despite meaningful approvals, deal-related litigation adds uncertainty.
Positive Factors
Profitability & Cash Conversion
Sustained high margins and near-par free cash conversion indicate durable earnings quality. Strong FCF relative to net income supports capital deployment, dividend coverage and resilience through credit cycles, underpinning long-term cash generation and shareholder returns.
Negative Factors
Top-line Softening
A recent TTM revenue decline and softer momentum signal potential challenges sustaining growth. For a bank reliant on loan and deposit expansion and fee income, persistent top-line softness can pressure margins, limit reinvestment capacity, and constrain longer-term earnings upside.
Read all positive and negative factors
Positive Factors
Negative Factors
Profitability & Cash Conversion
Sustained high margins and near-par free cash conversion indicate durable earnings quality. Strong FCF relative to net income supports capital deployment, dividend coverage and resilience through credit cycles, underpinning long-term cash generation and shareholder returns.
Read all positive factors
Webster Financial (WBS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.43B
Dividend Yield2.49%
Average Volume (3M)3.52M
Price to Earnings (P/E)12.5
Beta (1Y)1.28
Revenue Growth5.84%
EPS Growth37.42%
CountryUS
Employees4,297
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)6.12
Shares Outstanding162,026,500
10 Day Avg. Volume4,222,304
30 Day Avg. Volume3,522,219
Financial Highlights & Ratios
PEG Ratio0.30
Price to Book (P/B)1.06
Price to Sales (P/S)2.28
P/FCF Ratio10.00
Enterprise Value/Market Cap1.20
Enterprise Value/Revenue3.43
Enterprise Value/Gross Profit5.53
Enterprise Value/Ebitda11.31
Forecast
1Y Price Target
$73.08Price Target Upside-0.39% Downside
Rating ConsensusHold
Number of Analyst Covering6
EPS Forecast (FY)6.6
Revenue Forecast (FY)$3.05B
Webster Financial Business Overview & Revenue Model
Company Description
Webster Financial Corporation functions as the parent entity for Webster Bank, National Association, providing a comprehensive suite of banking, investment, and financial services throughout the United States. Its offerings cater to a diverse clie...
How the Company Makes Money
Webster primarily makes money through (1) net interest income and (2) noninterest (fee) income. Net interest income is generated by earning interest on loans and other interest-earning assets (such as securities) and paying interest on funding sou...
Webster Financial Earnings Call Summary
Earnings Call Date:Jan 23, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 16, 2026
Earnings Call Sentiment Positive
Overall the call conveyed a positive operational and financial performance profile: solid full-year profitability and capital generation, diversified loan growth, improving credit metrics, and strategic investments in growth verticals. Headwinds include elevated deposit competition, some near-term expense pressure from investments, GAAP adjustments in the quarter, and two remaining concentrated problem loan pools (office and health care) that are being actively managed. Management provided conservative but constructive guidance for 2026 with capital return optionality intact.Positive Updates
Strong Profitability and Returns
Full-year 2025 ROTCE of 17% and ROA of 1.2%; EPS increased 10% year-over-year, indicating improved profitability and shareholder value.
Negative Updates
Quarterly GAAP Adjustments Reduced Reported Earnings
Q4 had adjustments that reduced pretax income by $8M and after-tax income by $6M; excluding adjustments, adjusted PPNR was down $4.9M QoQ, highlighting some volatility between GAAP and adjusted results.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Profitability and Returns
Full-year 2025 ROTCE of 17% and ROA of 1.2%; EPS increased 10% year-over-year, indicating improved profitability and shareholder value.
Read all positive updates
Company Guidance
The company guided to 2026 loan growth of 5%–7% and deposit growth of 4%–6%, with midpoint revenue of $3.0 billion and GAAP net interest income of $2.57–2.63 billion (assuming two 25 bp Fed cuts), fees of $390–410 million and expenses of $1.46–1.48 billion (a few percentage points above Q4 adjusted levels); management expects a roughly flat full‑year NIM in the mid‑3.30% range (exit/December NIM 3.35%) and modeled a ~30% deposit beta. They reaffirmed a strong capital posture (CET1 ~11.2% today, near‑term target ~11%, long‑term target 10.5%), continued share repurchases (10.9 million shares repurchased in 2025, 3.6 million in Q4), and projected HSA Bank could add $1.0–2.5 billion of deposits over five years (including $50–100 million in 2026); recent operating metrics cited included Q4 assets up $880 million (1%), loans up $1.5 billion (2.8%) and +7.8% year, deposits +0.9% Q/Q (+6% year), ROTCE 17%, ROA 1.2%, EPS +10% YoY, tangible book value +13% YoY ($37.20 vs. $36.42), charge‑offs ~35 bps, allowance down $9 million Q/Q, NPAs down 8% and commercial classified loans down 7%.Webster Financial Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
78
Positive
Cash Flow
71
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.35B | 4.42B | 4.17B | 3.94B | 2.72B | 1.26B |
| Gross Profit | 2.70B | 2.69B | 2.36B | 2.50B | 2.19B | 1.28B |
| EBITDA | 1.32B | 1.33B | 1.09B | 1.16B | 879.78M | 575.37M |
| Net Income | 1.02B | 1.00B | 768.71M | 867.84M | 644.28M | 408.86M |
Balance Sheet | ||||||
| Total Assets | 85.58B | 84.07B | 79.03B | 74.95B | 71.28B | 34.92B |
| Cash, Cash Equivalents and Short-Term Investments | 2.87B | 2.46B | 2.08B | 10.68B | 8.73B | 4.70B |
| Total Debt | 5.62B | 4.32B | 3.36B | 3.87B | 7.69B | 1.39B |
| Total Liabilities | 76.01B | 74.58B | 69.89B | 66.26B | 63.22B | 31.48B |
| Stockholders Equity | 9.57B | 9.49B | 9.13B | 8.69B | 8.06B | 3.44B |
Cash Flow | ||||||
| Free Cash Flow | 1.20B | 1.01B | 1.37B | 938.35M | 1.31B | 672.00M |
| Operating Cash Flow | 1.25B | 1.06B | 1.40B | 978.65M | 1.34B | 688.59M |
| Investing Cash Flow | -5.37B | -4.75B | -3.87B | -2.60B | -7.19B | -2.41B |
| Financing Cash Flow | 4.47B | 4.06B | 2.82B | 2.49B | 6.23B | 1.91B |
Webster Financial Technical Analysis
Positive
73.37
Price Trends
73.08
Positive
71.66
Positive
65.98
Positive
Market Momentum
1.08
Negative
71.38
Negative
86.41
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 73.37 is below the 20-day moving average (MA) of 74.66, above the 50-day MA of 73.08, and above the 200-day MA of 65.98, indicating a bullish trend. The MACD of 1.08 indicates Negative momentum. The RSI at 71.38 is Negative, neither overbought nor oversold. The STOCH value of 86.41 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $10.93B | 12.68 | 11.67% | 1.37% | 41.57% | 41.57% | |
78 Outperform | $10.87B | 13.31 | 11.93% | 1.40% | 6.64% | 17.78% | |
75 Outperform | $12.43B | 12.54 | 10.80% | 2.49% | 5.84% | 37.42% | |
74 Outperform | $9.78B | 10.74 | 10.42% | 2.38% | 49.78% | 46.17% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | $8.90B | 9.42 | 12.88% | 1.80% | 10.29% | 17.94% |
* Financial Sector Average
WBS
Webster Financial
76.72
19.96
35.16%
UMBF
UMB Financial
143.80
36.37
33.85%
WTFC
Wintrust Financial
161.19
32.54
25.29%
WAL
Western Alliance
81.54
-0.50
-0.62%
SSB
SouthState Corporation
100.16
6.61
7.07%
Webster Financial Corporate Events
M&A TransactionsRegulatory Filings and Compliance
Webster Financial advances toward merger with Santander Bank
Positive
Jun 16, 2026
On March 30, 2026, Santander Bank, National Association filed a Bank Merger Act application with the Office of the Comptroller of the Currency to merge Webster Bank, National Association into Santander Bank, with Santander remaining as the survivi...
Executive/Board ChangesM&A TransactionsShareholder Meetings
Webster Financial Shareholders Approve Banco Santander Acquisition
Positive
May 27, 2026
On May 26, 2026, Webster Financial stockholders held a special meeting to vote on the proposed cash-and-stock acquisition of the company by Banco Santander under a February 3, 2026 transaction agreement. With 72.3% of eligible shares represented, ...
Legal ProceedingsM&A TransactionsShareholder Meetings
Webster Faces Lawsuits Over Santander Acquisition Disclosures
Negative
May 18, 2026
On February 3, 2026, Webster Financial agreed to be acquired by Spain’s Banco Santander through a two-step transaction in which Webster will first merge into a Virginia subsidiary and then be acquired via a share exchange, with the resulting...
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.