Webster Financial trades at $62.30 and has moved in lockstep with the market. Its shares have returned 10.6% over the last six months while the S&P 500 has gained 9.2%.
Is now the time to buy WBS? Find out in our full research report, it’s free.
Why Does WBS Stock Spark Debate?
Founded during the Great Depression in 1935 and evolving into a major Northeastern financial institution, Webster Financial (NYSE: WBS) is a bank holding company that provides commercial banking, consumer banking, and employee benefits solutions through its Webster Bank and HSA Bank division.
Two Positive Attributes:
1. Net Interest Income Skyrockets, Fueling Growth Opportunities
Our experience and research show the market cares primarily about a bank’s net interest income growth as one-time fees are considered a lower-quality and non-recurring revenue source.
Webster Financial’s net interest income has grown at a 22.1% annualized rate over the last five years, much better than the broader banking industry and faster than its total revenue. Its growth was driven by both an increase in its outstanding loans and net interest margin, which represents how much a bank earns in relation to its outstanding loan book.
One Reason to be Careful:
Projected Net Interest Income Growth Is Slim
Forecasted net interest income by Wall Street analysts signals a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.
Over the next 12 months, sell-side analysts expect Webster Financial’s net interest income to rise by 4.6%.
Final Judgment
Webster Financial has huge potential even though it has some open questions, but at $62.30 per share (or 1.1× forward P/B), is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More Than Webster Financial
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