WBS - Webster Financial: Not Yet Ready For An Upgrade

2024-07-19 17:27:59 ET

Summary

• Webster Financial Corporation stock was downgraded to "hold" in January after a 41% spike, but has since dropped 16.8%, and is now down some.
• Despite weak financial results in Q1 2024, shares are attractively priced on a relative basis, with low trading multiples compared to similar firms.
• With asset quality mixed and shares not yet cheap enough on an absolute basis, the stock isn't ready for an upgrade just yet, though it's inching closer that way.

One of the things that I love most about analyzing companies is being able to upgrade them. With very few exceptions, there aren’t any companies that I don't want to see succeed. One business that I feel that's getting close to deserving of an upgrade is Webster Financial Corporation ( WBS ). You see, back in late January of this year, I downgraded the firm from a "buy" to a "hold." This downgrade came after shares spiked 41% since my initial rating on the company. For context, the S&P 500 rose by only 10.8% over that same window of time. But after such a move higher, shares did not seem to offer much in the way of appreciation....

For further details see: