On Wednesday, Webster Financial Corporation (NYSE:WBS) saw its stock price target reduced by RBC Capital from the previous $57.00 to $54.00. Despite this adjustment, the firm maintained its Outperform rating on the banking company's stock.
The revision follows Webster Financial's first-quarter results, which showed some areas of concern. The report pointed out a lower than anticipated margin and spread revenue, coupled with weaker balance sheet growth during the quarter. Credit trends presented a mixed picture, although the metrics were deemed manageable.
RBC Capital has revised the 2024 outlook for Webster Financial, taking into account reduced projections for net interest income (NII) and loan growth. The updated expectations come in the wake of the recent quarterly performance.
Nevertheless, RBC Capital expressed continued confidence in Webster Financial's market position. The firm highlighted the bank's strong and diverse funding base as a key factor that supports its positive stance. According to the analyst, this aspect of Webster's operations sets it apart from its competitors and should help it navigate the current financial landscape.
In light of the recent findings, RBC Capital has adjusted its estimates for Webster Financial to align with the newly set price target and the bank's updated outlook for the coming year.
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