Deutsche Bank Downgrades Webster Financial (WBS) to Hold, Greater Risk to NIM

Deutsche Bank downgraded Webster Financial (NYSE: WBS) from Buy to Hold with a price target of $24.00.

"We remain positive on management and its ability to continue to execute on its P-to-60% plan, and still expect a 3Q12 EPS beat and the establishment of a share repurchase plan in 1H13 (near $100M), all of which should help support EPS trends and valuation in the near-term, analyst Matt O'Connor comments. "However, we see incrementally greater risk to NIM following the recent material drop in agency RMBS yields (agency RMBS represents 27% of earning assets), and see more limited upside to trading multiples near-term in light of this new headwind following the recent relative outperformance in the shares (WBS +10% 3 mos/+18% YTD vs. +1%/+13% for the mid caps), with shares now trading in line with our price target."

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 $24.03 yesterday.

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