Keefe, Bruyette & Woods (KBW) increased its 12-month price target on Webster Financial (NYSE: WBS) to $77.00 from $75.00 and kept its Outperform rating on the stock, citing the bank's solid end-of-year performance.
KBW attributed the price target bump to what it described as "strong Q4 results," noting that trends observed in the period point to strengthening loan growth momentum and improving credit quality through 2025. The research firm also highlighted Webster's most active share repurchase quarter of 2025, saying the buyback activity positions the company for continued solid results into 2026 and beyond.
In its outlook, KBW projected that Webster Financial will post double-digit growth in both EPS and tangible book value (TBV) for 2026 and 2027, and that the bank could achieve a 17% ROTCE - return on tangible common equity. To reflect these expectations, KBW raised its earnings estimates for Webster by 2% for 2026 and by 4% for 2027, while reiterating its Outperform rating.
Separately, Webster Financial Corporation released its fourth-quarter 2025 results, reporting an earnings per share of $1.59 versus analyst expectations of $1.53. Quarterly revenue was $746.2 million, above forecasts of $731.51 million. These figures constituted an earnings and revenue beat for the quarter.
Despite the favorable top- and bottom-line surprises, Webster's stock registered a slight pre-market decline following the release. The report notes that analyst firms did not announce any upgrades or downgrades in response to the earnings publication.
Taken together, KBW's revised target and the company-reported quarterly results underline a narrative of improving operating trends and shareholder-friendly capital deployment in late 2025. KBW's modest increase in estimates for 2026 and 2027 aligns with its expectation of continued earnings and TBV expansion as well as a specified ROTCE outcome.
Investors and market participants will be watching whether the strengthening loan growth momentum and the indicated credit-quality improvements persist into 2026, and whether continued buyback activity supports shareholder returns. For now, KBW maintains an Outperform stance and has adjusted near-term earnings assumptions upward in light of Webster's recent performance.