Webster Financial price target raised to $72 from $70 at Jefferies

Investing.com - Jefferies has raised its price target on Webster Financial (NYSE:WBS) to $72.00 from $70.00 while maintaining a Buy rating on the stock. The bank, currently valued at $10.1 billion, has demonstrated strong momentum with a 27.74% return over the past year. According to InvestingPro analysis, the stock appears to be trading below its Fair Value.

The price target increase follows Webster Financial’s quarterly earnings report, which showed core earnings per share of $1.52, exceeding both Jefferies’ estimate of $1.41 and the consensus estimate of $1.42.

The bank delivered strong performance with core pre-provision net revenue (PPNR) of $370 million, surpassing Jefferies’ forecast of $356 million, and management adjusted its net interest income guidance higher.

Webster Financial also reported an improvement in credit quality while maintaining a stable credit outlook, according to Jefferies’ analysis of the quarterly results.

The firm highlighted that recent federal legislation has expanded Health Savings Account (HSA) eligibility, which should significantly increase the addressable market for Webster’s HSA Bank business, which currently holds $9 billion in HSA deposits, representing 14% of the bank’s total deposits.

In other recent news, Webster Financial Corporation reported stronger-than-expected earnings for the second quarter of 2025, with earnings per share (EPS) of $1.52, exceeding the forecast of $1.43. The company’s revenue also slightly surpassed expectations, reaching $715.8 million compared to the anticipated $715.12 million. Additionally, Webster Financial saw growth in both loans and deposits, with loans increasing by 1.2% and deposits growing by $739 million. The firm also announced an authorization for $700 million in share repurchases, reflecting confidence in its future performance.

Citi has raised its price target for Webster Financial to $71 from $65, maintaining a Buy rating on the stock. This adjustment was influenced by stronger-than-expected credit results in the second quarter and anticipated improved credit trends in the latter half of 2025. Citi also highlighted Webster’s return on tangible common equity and its interest rate-sensitive balance sheet as positive factors. The newly formed joint venture with Marathon Asset Management is expected to contribute to loan growth and fee income in 2026.

Webster Financial’s total assets increased to $82 billion, up by $1.6 billion from the previous quarter, and its return on tangible common equity was reported at 18%. The company continues to focus on expanding its Health Savings Account (HSA) market and has reached operational realization of a joint venture with Marathon Asset Management. Overall, these developments indicate strong operational efficiency and effective financial management for Webster Financial.

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