UPDATE: Stephens Upgrades Webster Financial (WBS) to Overweight

(Updated - April 22, 2021 6:33 AM EDT)

Stephens analyst Matt Breese upgraded Webster Financial (NYSE: WBS) from Equal Weight to Overweight, PT $60.00 (from $56.00).

The analyst comments "Following this week’s announcement that WBS and STL were engaged in a MOE, set to create a $63 billion bank spanning Boston to NYC, we upgraded shares to Overweight (from Equal-Weight), increased our 2022 estimates by +24%, and increased price target to $60 from $56. The combined franchise is expected to have one of the highest profitability profiles amongst all regional banks with a 2022 ROA/ROTCE of ~1.45% and +16% vs. peers at ~0.90%-0.95% and ~11%, respectively. On top of exceptionally strong financial attributes, highlighted by +20% EPS accretion and minimum TBV dilution, we think the deal weds a like-minded commercial/consumer banking effort and creates a strong combination of differentiated asset classes on the STL side with a best-in-class deposit franchise on the WBS side. In short, despite the stock’s reaction and concern on the dilution to the WBS story (particularly HSA), at <10x EPS we think shares are undervalued."

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 $51.00 yesterday.

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