Boenning & Scattergood Downgrades Webster Financial (WBS) to Neutral

Boenning & Scattergood downgraded Webster Financial (NYSE: WBS) from Buy to Neutral.

Analyst Scott Beury commented, "Historically, shares of WBS traded at a discount relative to peers. Over time the company migrated from a classic thrift with a thrift valuation. More recently, the company cured credit problems and enhanced its operating performance significantly enough to trade in-line with peers. That said, the pace of earnings growth has slowed and the outsized improvements from 2010 and 2011 are long gone. We believe the company’s focus on its Health Savings Account (“HSA”) bank will ultimately prove to be the driver of above-industry growth due to its extraordinarily sticky funding in a higher rate environment and ultimately, enhanced profitability metrics. These factors suggest to us that the company should trade at a modest premium to its peers, and at present, it does on both a P/E and price-to-tangible-book basis. Additionally, the shares have closed above our $34.00 target price for several days consecutively. As such, we are reducing our rating from Outperform to Neutral."

For an analyst ratings summary and ratings history on Webster Financial click here. For more ratings news on Webster Financial click here.

Shares of Webster Financial closed at $36.79 yesterday.

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