WBS: Share Repurchases And Strong Margins Will Support Future Upside Potential

Analysts have nudged their price target for Webster Financial modestly higher to approximately 71.76 dollars from about 71.59 dollars, citing slightly improved profit margin expectations. These expectations more than offset a small reduction in projected revenue growth and a lower anticipated future price to earnings multiple.

What's in the News

• Completed a major share repurchase program, buying back 5,766,646 shares between July 1 and November 10, 2025, and finishing a cumulative 23,809,327 share repurchase, equal to 16.26% of shares outstanding, under the November 6, 2017 authorization (Key Developments).
• Deployed approximately 329.78 million dollars in the latest tranche of buybacks, bringing total capital returned through this program to about 1,185.31 million dollars (Key Developments).
• Reported third quarter 2025 net charge offs of 38.4 million dollars, up from 36.4 million dollars in the prior quarter and 35.4 million dollars a year earlier, with the net charge offs to average loans and leases ratio edging up to 0.28% from 0.27% (Key Developments).

Valuation Changes

• The fair value estimate has risen slightly to about 71.76 dollars from roughly 71.59 dollars, reflecting a modest upward revision in intrinsic value.
• The discount rate has increased marginally to approximately 6.97% from about 6.93%, implying a slightly higher required return on equity.
• The revenue growth assumption has fallen moderately to around 9.36% from roughly 10.68%, indicating a more cautious outlook on top line expansion.
• The net profit margin forecast has improved slightly to about 34.62% from approximately 34.48%, suggesting a minor enhancement in expected profitability.
• The future P/E multiple has declined meaningfully to roughly 10.07x from about 11.37x, pointing to a more conservative valuation framework despite the higher fair value estimate.