Briefing From The Editor -- WBS Stock

Webster Financial logged a -8.21% change during today's morning session, and is now trading at a price of $45.25 per share. The S&P 500 index moved -0.4% and the Nasdaq posted a -0.35% change.

Webster Financial shares moved -14.76% over the last 52 weeks, with a high of $58.56 and a low of $39.77. During this time, the stock lagged the S&P 500 index by -7.96%. As of January 2022, the company's 50-day average price is $50.67. Webster Financial Corporation is the banking holding company for Webster Bank, a National Association that provides a variety of banking, investment, and financial services to individuals, families, and businesses in the United States. The mid-cap Finance company is based in Stamford, CT. Webster Financial has returned a 3.25% dividend yield over the last 12 months.

Compared to the Finance sector's average of 14.34, Webster Financial has a trailing twelve month P/E ratio of 12.16 and, according to its EPS guidance of 7.4, an expected P/E ratio of 6.11. Webster Financial's PEG ratio is 0.32 based on its 38.0% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by Webster Financial's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 0.93, which still suggests that company's shares are possibly undervalued.

Furthermore, Webster Financial is likely undervalued in terms of its equity because its P/B ratio is 1.058 compared to its sector average of 1.57. The company's shares are currently trading -27.36% below their Graham number, implying there is a margin of safety for the stock. The Graham number is calculated according to the formula:

√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 3.86 * 44.67) = $62.29

10 analysts are following Webster Financial and have set target prices ranging from $55.0 to $75.0 per share. On average, they have given the company a rating of buy. At the current price of $45.25, WBS is trading -30.33% away from its average analyst target price of $64.95 per share, implying an analyst consensus of strong upside potential for the stock.

The company has an average amount of shares sold short since 4% of the company's shares are tied to short positions. Institutions own 88% of Webster Financial's shares, while the insider ownership rate stands at 1%.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.